Half of the world’s population could use digital wallets by 2025
More than half of the world’s population could use digital wallets by 2025, according to a new study.
According to a new report from the mobile payment network Boku, the number of digital wallets carrying out more than $ 1 million in annual transactions is expected to increase by 27% between 2020 and 2025.
At the end of 2020, the survey found that there were 2.8 billion digital wallets in use, an obvious boon for merchants – but that figure is expected to increase by almost 74%, to 4. , 8 billion by the end of 2025.
Key markets for digital wallet growth are Southeast Asia, Latin America, Africa and the Middle East, many consumers are avoiding cash and cards for a more convenient digital payment option.
In Southeast Asia alone, digital wallet usage is expected to increase by 311% between 2020 and 2025. Meanwhile, the Far East and China are the world’s largest digital wallet region, with 1.34 billion users in 2020.
Conversely, the adoption of digital wallets has been less dynamic in Western Europe and North America, with growth of 65% in the first geographic area and 50% in the last region expected by 2025. However , the UK is singled out in research as having shown some kind of growth spurt for digital wallets. The pandemic and the desire to switch to using cash much less frequently appear to be driving the increase according to research.
âAs digital wallets are used globally, we are finding that two distinct types are in use today. One is card-based digital wallets, like Apple Pay and Google Pay, which provide an easier way to pay with cards people already have. The other is stored-value digital wallets, like AliPay and GrabPay, which allow consumers to transact with digital money and are popular in emerging markets with rapidly growing e-commerce sectors, âhe said. said Adam Lee, product manager at Boku.
âThe markets that are expected to grow the fastest are those with the lowest card penetration levels, stored value wallets are booming. In North America and Western Europe, which are dominated by card-based digital wallets, we are seeing the slowest growth in digital wallet adoption as the technology only provides one more advantage. “
The study also highlights just how invaluable the growing appeal of digital wallets could be for traders, provided they invest in the right technology to take advantage of the growth.
Updating point-of-sale systems and other business infrastructure is therefore vital for e-commerce businesses to realize the potential, alongside more conventional brick-and-mortar stores.