Exacerbated by the pandemic, the use of mobile wallets is projected to encompass half of all transactions by 2024.
This is according to new insight from Merchant Machine, which has highlighted the growing popularity and prevalence of the payment technology.
There is no doubt that shopping habits over the past few years have been defined by the Covid-19 pandemic. In order to comply with safety measures, many opted for cashless transactions often enabled by mobile wallets.
The safety, security and convenience of digital wallets as well as the popularity of smartphones and the general digitalisation of society were among the main reasons for the popularity of this method.
As emphasised by the report, the number of digital wallet users swelled by over 50 per cent from 1.4 billion to 2.3 billion between 2019 and 2020. This figure is to expect steady growth this year, increasing slightly to 2.66 billion users.
In terms of what this means for revenue, since 2015 the total revenue generated by mobile payment apps has nearly tripled with mobile wallets expected to generate over $1639.5trillion this year.
Fifty-one per cent of all transactions are predicted to be cashless by 2024.
The leading digital wallet providers
Merchant Machine has identified which digital wallets are leading the industry in regards to the number of users worldwide. The mobile payment platforms WeChat and Alipay have amassed 650 million and 550 million users respectively.
According to Focus Finance, when Alipay introduced e-wallets, usage began to increase substantially. ‘Alibaba was able to seamlessly integrate AliPay into their online marketplace and easily acquire new users by cross-marketing it with their current service offerings”, they explained.
Other platforms that made it to the top five include Apple Pay with 507 million users, Google Pay with 421 million users and PayPal with 377 million users. Their popularity in Europe and North America is down to mobile brands such as Apple and Samsung whose products are dominating the market.
According to the Merchant Machine study, China has experienced the biggest adoption of mobile payments among its citizens. The common usage of contactless payments in China is down to society utilising tech solutions in every aspect of their life.
Technologically advanced Nordics have also made it into the top 10, with Denmark (2nd), Sweden (5th) and Norway (8th) seeing the biggest increase in people using contactless payment methods.
It was additionally found that US citizens’ adoption of mobile wallets has increased by over 14 per cent between 2019 and 2021, which is the most significant out of all countries on the list.
Besides mobile wallets, the only method of payment that will see an increase in popularity among consumers is buy now, pay later (BNPL) schemes such as Klarna or Clearpay. These methods are particularly popular among millennials and gen Z users due to the possibility of splitting the cost into monthly instalments.