Digital Commerce’s Tipping Point: A Look Ahead to 2035
The digital commerce landscape is on the cusp of a massive transformation. A new report, commissioned by Tietoevry Banking and conducted by Celent, a leading research firm, paints a fascinating picture of what the e-commerce world could look like by 2035. It’s not just about online shopping; it’s about how we pay, how we buy, and the role of technology in shaping our transactions.
E-commerce Explosion: Value Almost Doubling
One of the most striking predictions from the report is the significant growth in digital commerce. Across key European markets – Germany, the Netherlands, Poland, Spain, and the UK – the value of digital transactions is expected to nearly double, reaching a staggering €1.090 trillion by the middle of the next decade. This represents a monumental opportunity for businesses to capitalize on the ever-growing online market.
Did you know? E-commerce sales worldwide reached $5.7 trillion in 2023 and are projected to reach $8.1 trillion by 2026, according to Statista.
The Rise of Account-to-Account (A2A) Payments: Cards Take a Backseat?
The report highlights a significant shift in payment methods. While card-based transactions will continue to grow, Account-to-Account (A2A) services are poised to gain substantial market share. Celent predicts that A2A payments could account for around 40% of e-commerce transactions by volume in 2035, up from 24% in 2025. This shift is driven by several factors, including increased security, lower transaction fees, and regulatory initiatives like Open Banking.
A2A payments enable direct transfers between bank accounts, bypassing traditional card networks. This provides merchants with a cost-effective alternative and offers consumers a potentially smoother and more secure payment experience. Explore this trend further in our article, “The Future of Payments: Why A2A is Gaining Traction.”
AI Agents: The Future of Shopping is Automated
Perhaps the most transformative prediction revolves around the emergence of smart AI agents. These AI-powered assistants will be capable of initiating transactions on behalf of consumers, automating the entire buying process. Celent projects that the value of agent-initiated digital commerce will reach €191 billion across the five analyzed markets, representing 17.5% of the total e-commerce volume. Imagine AI agents that handle everything from price comparisons and product selection to payment processing and delivery tracking.
Pro tip: Businesses should begin exploring how AI agents could integrate into their e-commerce strategies. Consider areas where AI could improve customer service, personalize product recommendations, and automate repetitive tasks.
Industries Primed for AI Agent Disruption
The report suggests that specific sectors will be particularly impacted by AI agents. These include travel, food and drink, digital content, DIY/gardening, financial services, and entertainment. Within these sectors, AI agents could revolutionize how consumers search, compare, and purchase goods and services. For example, an AI agent might automatically book a vacation based on your preferences and budget or order groceries based on your dietary needs.
Pay Now, Pay Later, and Beyond
The report also explores the evolution of payment options. The “pay now/pay later” ecosystem will continue to expand, offering consumers various choices, including instant payments and credit options like Buy Now, Pay Later (BNPL). Banks and wallet providers have the opportunity to innovate within this space, creating new credit offerings specifically tailored for A2A and wallet products. The report projects that credit on A2A transactions could reach €35.7 billion by 2035.
Read more about the BNPL trend in our piece “Buy Now, Pay Later: Opportunities and Risks”.
Preparing for the Future of Digital Commerce
Natalija Dmitrijeva, Head of Instant, Retail Payments, and Cards at Tietoevry Banking, highlights the importance of proactive preparation. “To play a leadership role in an expanding and changing payment landscape, banks and fintechs must be clear on the way one wants to play in e-commerce, digital wallets, and the development of digital identity infrastructure,” she advises.
This involves more than just embracing new technologies. Financial institutions need to streamline their payment operations, collaborate with external partners, and develop flexible strategies to adapt to the evolving landscape.
Frequently Asked Questions (FAQ)
- What are A2A payments? A2A payments are direct bank transfers, offering a potential alternative to card payments.
- How will AI agents change e-commerce? AI agents will automate buying processes, handling tasks from product selection to payment.
- Which industries will be most affected by AI agents? Travel, food and drink, and digital content, among others, are likely to see significant impact.
- What’s the role of banks in this future? Banks must innovate and collaborate to maintain a competitive edge in the changing payment ecosystem.
Ready to learn more? Explore the full Celent report here: www.tietoevry.com/Payments2035report
What are your thoughts on the future of digital commerce? Share your insights in the comments below! And don’t forget to subscribe to our newsletter for more expert analysis and industry trends.
