Mobile wallets have been a revelation and their usage are on the rise across the globe. Interestingly, it was the most popular POS payment approach last year, contributing to nearly 21.5 percent of all global transaction payment market share. Debit cards and credit cards held a share of 20 percent and 12 percent respectively.
According to a latest research paper, 50 percent of the world’s population will use a mobile wallet. By the end of 2020, nearly 2.8 mobile wallets were in use across the globe. The Covid-19 pandemic also plays a pivotal role in accelerating the usage of mobile wallets in regions such as Southeast Asia, Latin America as well as Africa.
According to Boku’s Mobile Wallets Report, Southeast Asia is the fastest-growing region in the world, when it comes to mobile wallet usage.
Adam Lee, Chief Product Officer at Boku said, “While mobile wallets are being used on a global basis, we see two distinct types being used today. One is card-based mobile wallets, like Apple Pay and Google Pay, which provide an easier way to pay with cards people already have. The other is stored value mobile wallets, like AliPay and GrabPay, that enable consumers to transact with digital cash and are popular in emerging markets with fast growing eCommerce sectors.
“The markets that are set to grow the fastest are those with the lowest levels of card penetration, stored value wallets are thriving. In North America and Western Europe, which are dominated by card-based mobile wallets, we are seeing the slowest growth in mobile wallet adoption, as the technology provides merely incremental benefit.”
“We are seeing clear bifurcation in the market between card-based mobile wallets in developed markets and stored value mobile wallets that are ubiquitous in Asia and rapidly growing in all emerging markets,” he added.
Mobile wallet to become a $3.5 trillion industry by 2023
While debit or credit cards remain a dominant form of payment in developed economies, mobile wallets or digital payments are on the rise in emerging markets such as Southeast Asia or Sub-Saharan Africa. A new report from finance and investment company Finaria revealed that the mobile wallet industry will grow to $2.4 trillion this year, a 24 percent increase year-on-year.
The report further mentioned that mobile wallets will be a $3.5 trillion industry by 2023. It is, without doubt, we can say China is the global leader when it comes to digital payment. Chinese companies such as Alipay and WeChat revolutionised digital payments. However, surprisingly, markets such as the US are picking up the trend.
Covid-19 accelerating mobile wallet usage
The Covid-19 pandemic has definitely fast-tracked digital adoption. Due the contagious nature of the Covid-19 virus, people are being asked to stay indoors and they are going online to satisfy their wants. As a result of the pandemic, we are witnessing a paradigm shift in payments driven by mobile wallets.
In the last year, e-commerce has boomed substantially across the globe which is facilitating digital payments. Many stores are now offering digital wallet payments to curb the spread of the virus. Tech giants such as Google and Apple or even Facebook have also entered this space recently.