The rise of e-commerce and the cashless society

19-03-2020

Sales in the EU still predominantly take place offline – in bricks and mortar shops – and purchases are still predominantly made with cash. However, thanks to the level of convenience they offer, both online shopping and cashless electronic payments are booming and are among the key drivers of the digital transformation taking place in our economy and society. The real-time accessibility of e commerce products and their availability 24 hours a day, together with the ease of making electronic payments, are disrupting many aspects of traditional consumer shopping behaviour, which is also increasingly driven by widespread use of mobile devices and apps. Online sales hit a record high in 2019. At the international level, China is leading in both e-commerce transactions and mobile cashless payments. However, the coronavirus (COVID-19) crisis has put countries across the world, starting with China, into extraordinary conditions, with citizens staying at home; and some sellers trying to extract the highest profit possible from the situation. In the EU, a large majority of internet users, particularly those under the age of 45, shop online. Clothes, sports goods, travel and online content such as games, videos and music are among the most popular items. This trend is also driven by the increase in cashless payments, which have become very popular in some countries. The numerous different cashless payment methods in existence are often highly localised. One such example, the e-wallet, is gaining particular importance, driven by the over 2 billion users it enjoyed in 2019. On the other hand, e-commerce and the cashless society are facing a host of challenges related to cybercrime, fraud, privacy, the digital divide and pollution, among others. The coronavirus outbreak is also posing various challenges to e-commerce supply chains, many of which are based in the hardest-hit countries. However, the opportunities that e-commerce and cashless transactions afford in terms of convenience, efficiency and affordability will help them gain further ground in the years to come; their popularity among younger generations and strong EU-level policy support for digital transformation are also helping boost their prospects.

Sales in the EU still predominantly take place offline – in bricks and mortar shops – and purchases are still predominantly made with cash. However, thanks to the level of convenience they offer, both online shopping and cashless electronic payments are booming and are among the key drivers of the digital transformation taking place in our economy and society. The real-time accessibility of e commerce products and their availability 24 hours a day, together with the ease of making electronic payments, are disrupting many aspects of traditional consumer shopping behaviour, which is also increasingly driven by widespread use of mobile devices and apps. Online sales hit a record high in 2019. At the international level, China is leading in both e-commerce transactions and mobile cashless payments. However, the coronavirus (COVID-19) crisis has put countries across the world, starting with China, into extraordinary conditions, with citizens staying at home; and some sellers trying to extract the highest profit possible from the situation. In the EU, a large majority of internet users, particularly those under the age of 45, shop online. Clothes, sports goods, travel and online content such as games, videos and music are among the most popular items. This trend is also driven by the increase in cashless payments, which have become very popular in some countries. The numerous different cashless payment methods in existence are often highly localised. One such example, the e-wallet, is gaining particular importance, driven by the over 2 billion users it enjoyed in 2019. On the other hand, e-commerce and the cashless society are facing a host of challenges related to cybercrime, fraud, privacy, the digital divide and pollution, among others. The coronavirus outbreak is also posing various challenges to e-commerce supply chains, many of which are based in the hardest-hit countries. However, the opportunities that e-commerce and cashless transactions afford in terms of convenience, efficiency and affordability will help them gain further ground in the years to come; their popularity among younger generations and strong EU-level policy support for digital transformation are also helping boost their prospects.