A veteran with 30+ years in the payments industry, Worldpay
announces the release of its first research on payment behaviors and
preferences in retail trading and investments. The findings have been shared with
the general public on November 2 at Hong Kong Fintech Week.
Conducted in collaboration with global data and analytics provider,
GlobalData, the report titled “Trading
Up: The Current Preferences of Traders and Investors”, takes a closer look
at investor and trader payment preferences across 10 countries including
Argentina, Australia, Brazil, Japan, the U.S., the U.K., France, Germany,
Singapore and the UAE.
More than 10,000 online traders and investors from these countries,
aged between 18 and 65+, have participated in the study which aims to raise
awareness among investment service providers and trading platforms about the
latest payment trends and tendencies globally.
The research determines an intrinsic correlation between payment
behaviors across these geographies, age groups and asset preferences. Here are
some of the key findings.
A constantly growing market
The global trading and investment market has seen significant expansion
in recent years and its popularity is poised to grow even further. From US$9.32
billion in 2022, it is estimated to reach $15.34 billion by 2030 at a CAGR of
6.4%1. The major drivers of this growth are:
● The rise
of ultra-convenient mobile trading
● Lower
fees and commission-free trading
● Technology
progress enabling real-time trading, analysis and trade automation
● The
growing popularity of crypto assets
● The
rising number of online trading platforms and service providers
● The
increasingly prominent role of social media and online advertising
Profiling the new-age investor
With the rise of sophisticated trading technologies a new type of
investor emerged – the new-age investor. New-age traders and investors are
attracted to stock shares traded by 53.8% of the survey participants, cryptocurrencies
traded by 35.8% of the respondents and ETFs, which provide a passive, low-cost
investment alternative for 29.6% of traders around the globe.
Keeping abreast of payment
trends: Drivers of pay-in preferences
According to the research, pay-in and payout method preferences not
only vary by country and age, but also by different attributes important in the
customer journey.The advent of
mobile technology has also impacted payment behaviors, with 59% of the world’s
traders and investors pivoting to using their mobile devices to trade. Of
these, 40.5% use their credit/debit cards to fund their trading accounts. From
a country-specific perspective, the U.K. and Japan have the highest weighting
of debit and credit card usage respectively.
Following closely, digital wallets such as PayPal, Apple Pay or Google
Pay are used by nearly 1 in 5 consumers worldwide for the convenience they
provide, without the requirement of re-entering payment details every time a transaction
is made.
In parallel, there is also the widespread tendency among more mature
traders (65+) and investors to use bank transfers, with 61% resorting to this
payment method to deposit funds into their trading accounts. This preference
for bank transfers is seen in countries such as the U.S., Germany, Brazil and
Australia.
The major drivers behind these payment choices are security (most important
for 1 in 3 investors), simplicity and speed (most valued by 1 in 4 investors),
and instant deposit notification (considered most key by nearly 1 in 5
investors).
Drivers of payout preferences
Of the payout options widespread among respondents, bank transfers rank
highest with 48.8% receiving their latest trade payment to their bank accounts.
Country-wise, the U.S. leads the trend with 1 in 2 traders preferring bank
transfers over other payout options.
Card payouts are preferred by 14.3% of traders globally, with 15.1%
making their most recent withdrawals in this way. Geographically, the U.K. and
France display a higher-than-average preference for card payouts. Conversely,
in countries such as the UAE, Argentina and Germany, digital wallets are
preferred.
Asset classes also impact
payment preferences
There is a clear correlation between payment preference and asset
choice. For example, time-sensitive trading such as Forex or cryptocurrencies
is more likely to require real-time payments ensured by credit cards or digital
wallets. In comparison, stock share investments that might require larger
deposits could benefit from the lower transaction fees and security of bank
transfers.
Across the geos analyzed, the U.S., Japan, France, Australia and the U.K.
have a higher-than-average weighting of stock trading and share investments.
Germany and Singapore also show a taste for stocks and shares alongside ETF
holdings. Conversely, Argentina, the UAE and Brazil are home to a sizable
proportion of cryptocurrency traders.
Optimizing the payment
experience
Although online traders and investors are broadly satisfied with their
payment experience globally (47.4%), the rest of the answers suggest there might
be room for improvement.
1 in 5 investors said they would seek the services of another platform
if they cannot use their preferred method to pay in or out. Correspondingly, 1
in 4 said they would look for an alternative provider if their payment was
declined.
Of note, 36.8% of the respondents cited the ability to use the same
payment method they use for day-to-day transactions as a key driver of
satisfaction. Platform owners need to ensure they can match day-to-day consumer
expectations for a wide range of payment options and channels.
To find out more trends that could help with addressing dissatisfaction
concerns and payment preferences, download the full report here.
1 Fortune Business Insights (2023) Online Trading
Platform Market [Accessed: 02/09/2023]. → https://bit.ly/3ZDtw1O