Online Payments in Apparel – Thematic Research

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Online apparel sales was valued at $462.8 billion in 2020. The market is expected to grow at a CAGR of more than 12% during 2020-2025.  Card payments, which have been the dominant method for online payments, are having their position challenged with the introduction and adoption of alternative payment methods, which is taking away market share from card payments. Ecommerce analytics also showed that, on a global level, alternative payments (collectively) are now comfortably ahead of card-based payments in terms of transaction value online.

Online payments in apparel market overview

Online payments in apparel market overview

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Which are the key technology trends impacting online payment in apparel industry ?

The key technology trends in the online payment market in apparel industry are biometrics, buy now pay later, CDBCs, cryptocurrencies, and non-fungible tokens.


Biometric technologies represent a set of solutions that can help improve online payment security while reducing friction layers during the payment process. Biometric identifiers such as fingerprints, facial recognition, and voice recognition are difficult to replicate by online criminals, which helps reduce the amount of online fraud compared with password-based security.

Buy now pay later

In addition to digital wallets, another payment method that is becoming popular— especially among young consumers—is Buy Now Pay Later (BNPL). BNPL has seen rapid growth in recent years, and this trend was accelerated by the COVID-19 pandemic. BNPL is positioned as a cheaper alternative to credit cards, as it enables consumers to make payments in multiple installments without fees or interest.


There is growing interest from many governments in developing their own digital currencies, which are also known as Central Bank Digital Currencies (CBDCs). This is mainly motivated by the drive for financial inclusion, the possibility of eliminating cash, as well as the need to create an alternative to cryptocurrencies and stablecoins. CBDCs have the potential to facilitate financial inclusion through smartphone-based payment and banking services for unbanked populations—especially in developing countries where smartphone penetration is higher than card penetration.


Cryptocurrencies are the most well-known use case for blockchain technology. While most probably associate cryptocurrencies purely with Bitcoin, there are over 9,000 cryptocurrencies. These include stablecoins, privacy coins, utility tokens, security tokens, and more—all with different functions and characteristics.

Non-fungible tokens

Non-fungible tokens (NFTs) are another application of blockchain technology. In simple terms, NFTs are a way to transform a digital good that traditionally could be endlessly copied, into something unique that can be verified on a blockchain. It is a digital version of a certificate of authenticity.

Which are the key macroeconomic trends impacting online payment in apparel industry?

The key macroeconomic trends impacting online payment in apparel industry are COVID-19, cross-border payments, electronic payments push, geopolitics and China, regulations: blockchain, and regulations: BNPL.


The global COVID-19 pandemic was probably the single most impactful theme on the global economy in 2021. The online payments sector greatly benefited from the pandemic as consumers’ mobility was restricted, and they were forced to rely on online platforms to meet their basic needs. Customers moved purchases online and developed new payments habits, which contributed to the growth of alternative payments such as digital wallets and P2P apps.

Cross-border payments

The current landscape of online cross-border payments is still dominated by MoneyGram and Western Union. But new challengers such as WorldRemit and Wise are challenging these long-established players. Both Wise and WorldRemit can offer international cross-border transactions at a lower rate than MoneyGram and Western Union.

Electronic payments push

The payments industry, in general, has historically been pushing for cashless societies in the interest of maximizing the proportion of transactions that generate revenue. Regulatory efforts to reduce cash use, such as those seen in Italy and India (usually to reduce the size of the parallel economy and bolster tax revenues from easily tracked electronic payments), tend to have the full support of the payments industry.

Geopolitics and China

China is the world’s largest online payments market by a significant margin, and the key players—UnionPay, Ant Financial, and Tencent—are all tied up to one degree or another with the Chinese government.

Regulations: blockchain

Blockchain technology is not regulated in most countries. The approach to the sector is still disjointed at a global level. While Switzerland passed a new set of laws in favor of blockchain called the Blockchain Act in 2020 (which should incentivize investments in the technology) some countries are still considering what is the appropriate approach to dealing with it.

Regulations: BNPL

The BNPL sector was able to grow rapidly and provide credit services to consumers without regulatory oversight. Despite presenting itself as a cheaper and more flexible alternative to credit cards, BNPL interest-free credit has the potential to let consumers accumulate debts that they cannot pay off.

What are the key payment tools in the online payments market in apparel theme?

The key payment tools in the online payments market in the apparel theme are bank transfers, cash/cheque, cards, and alternative payments. In 2020, the most dominant payment tool was card payments in most regions except for Asia-Pacific, which saw strong adoption of alternative payments in comparison to the rest of the world. Growing online penetration and smartphone usage has resulted in the rise of mobile commerce (m-commerce) and mobile payments. M-commerce has witnessed rapid growth in recent years and is very popular among millennials and Gen Z consumers.

Online payments in apparel, by payment tools

Online payments in apparel, by payment tools

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Which are the key companies in the online payments market in apparel industry?

The key companies in the online payments market in apparel industry are ACI Worldwide, American Express, Amazon, Alipay, Danske, Google Pay, Paytm, Tenpay, Visa, and Walmart Pay.

Market report scope

Online apparel sales value (2020) $462.8 billion
CAGR >12% (2020-2025)
Key technology trends Biometrics, Buy Now Pay Later, Cdbcss, Cryptocurrencies, and Non-Fungible Tokens
Key macroeconomic trends COVID-19, Cross-Border Payments, Electronic Payments Push, Geopolitics and China, Regulations: Blockchain, and Regulations: BNPL
Key payment tools Bank Transfers, Cash/Cheque, Cards, and Alternative Payments
Key companies ACI Worldwide, American Express, Amazon, Alipay, Danske, Google Pay, Paytm, Tenpay, Visa, and Walmart Pay


  • COVID-19 boosts online payments in apparel
  • Apparel retailers offer frictionless payment methods
  • Mobile commerce will become the biggest part of ecommerce
  • The market demands rapid innovation or M&A to keep up

Reasons to Buy

  • Gain a comprehensive understanding of the role played by online payment systems in the apparel industry.

ACI Worldwide
American Express
Google Pay
Walmart Pay

Table of Contents


Executive Summary


Technology Briefing


  • Technology trends
  • Industry trends
  • Macroeconomic trends

Industry Analysis

  • Retail online sales and penetration
  • Retail payments
  • Mergers and acquisitions
  • Timeline

Value Chain

  • Consumer
  • Payment processing


Sector Scorecards

  • Payments sector scorecard


Further Reading

Our Thematic Research Methodology

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