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