The financial industry has been anticipating the death of cash for years, pointing to the adoption of smartphones and digital payments as catalysts. But while cash isn’t quite dead, The Global Payments Report from Worldpay from FIS® points to a continued shift in e-commerce payments worldwide toward digital wallets.
With digital wallets projected to rise to 52.5% of transaction value in 2025, it’s critical that businesses understand what’s propelling their adoption and usage.
1) Super apps are becoming super popular.
Combining multiple functions, including financial services, super apps facilitate one-stop consumer experiences. Users can chat, order food, reserve movie tickets, book travel and much more – and then pay for all these goods and services from one platform. One example is Rappi, which began as a food delivery service but now offers everything from travel to live streaming across multiple countries in South America.
2) Consumers prefer the streamlined checkout process.
According to The Global Payments Report, simplicity and speed are the main reasons consumers use digital wallets over traditional wallets. You don’t have to carry cash and cards to make purchases; you just need your smartphone. And with consumers spending five to six hours per day on their devices, these purchases are becoming as common at the point of sale as they are online.
The Global Payments Report also found that mobile wallets’ share of global POS transactions jumped over 21% YoY in 2021, rising to 28.6% of global POS transaction value, or over US $13.3 trillion.
3) Many online marketplaces are including wallets in their offerings.
A few years ago, most digital wallets contained consumers’ credit and debit cards. But The Global Payments Report shows consumers are now using a variety of payment methods to fund their digital wallets, including bank accounts (35% global average), debit cards (26%) and credit cards (23%). This flexibility in payment types is another motivator driving digital wallet usage. And it’s not confined to one region; digital wallets’ share of e-commerce value is forecast to grow at double digit CAGR across APAC, Europe, LATAM, MEA and North America.
4) The adoption of contactless payments has accelerated.
Consumers began using cash less and mobile wallets more during the pandemic – and they don’t appear to be going back. For example, according to UK Finance, the number of contactless credit card transactions in the UK in December 2021 was 57.5% higher than the previous December and 60.8% higher than December 2019. The number of contactless debit card transactions was 37.9% higher than December 2020 and 79.3% higher than December 2019.
5) More Insights
Discover more about digital wallet trends and what’s happening in payments around the world by downloading The Global Payments Report.