The Rise of Digital & Mobile Wallets in 2022
With the rapid rise of the fintech ecosystem, which now includes a variety of digital banks, credit card machines and wallets, customer preference for various payment methods has never been more important. Many fintech companies are embracing a user-centric approach to bring innovation that delivers a smooth payment procedure for clients, beating out a product-first approach.
According to Juniper Research, the number of people using digital wallets is expected to reach 4.4 billion by 2025, with QR codes accounting for 40% of all digital wallet transactions. But how realistic are these statistics?
Merchant Machine has compiled the facts and data around mobile wallets to create a picture of one of the world’s fastest-growing technological markets. The study looks at how people use mobile wallets in different countries, at different ages, and with different mobile wallets.
Merchant Machine has also analysed mobile payment app users. In 2015 it was estimated that there were 0.4 billion users and by the end of 2022 this number will rise to 2,661 billion.
| Year | Next-gen payment technology market | Mobile payment app | Mobile payment app |
|---|---|---|---|
| Transaction value in billion ($) | users in billion | Revenue ($) billion | |
| 2015 | 1,592.2 | 0.4 | 550 |
| 2016 | 2,211.25 | 0.5 | 660 |
| 2017 | 3,104.33 | 0.8 | 780 |
| 2018 | 4,296.67 | 1 | 960 |
| 2019 | 6,109.64 | 1.4 | 1,100 |
| 2020 | 8,961.22 | 2.3 | 1,390 |
| 2021 | 11,141.55 | 2.307 | 1,476.7 |
| 2022 | 13,979.85 | 2.661 | 1,639.5 |
The demand for secure and simple financial transactions has fueled the growth of the next generation payment technology market.
The global technology market has grown significantly from $1,592.2 billion in 2015 to $13,979 billion in 2022, due to the increased usage of smartphones, wearable technology, e-commerce, and the adoption of banking and financial services. This could be attributed to the introduction of cutting-edge technology as well as the availability of a wide range of payment technology products.
According to Forbes, COVID-19 changed the way we shop and pay for goods and services. The conveniences of digital wallets were well suited to the shifts customers were making within the pandemic, with the emphasis on limiting physical encounters in public. It comes at no surprise that the mobile payment apps revenue is expected to see an increase from $550 trillion in 2015 to $1,639.50 trillion by the end of 2022.
The use of Digital Mobile wallets is set to see an increase of 16% by 2024
The immediate effect of the global pandemic was a significant drop in expenditures as well as cash usage. The fear of getting coronavirus at high-traffic ATMs as well as retailers’ refusal to accept cash were the main causes of the increase in the use of digital mobile wallets, passing from 44.50% in 2020 to a predicted 51.70% in 2024.
The use of physical credit cards is predicted to see an 8% decrease from 22.80% in 2020 to 20.80% in 2024. Other forms of e-commerce payment methods are predicted to see a decrease as well, like in the case of debit cards, bank transfers, cash on delivery and charge and deferred debit cards.
Buy Now Pay Later is another form of e-commerce payment method that has been increasing over the years, with industry leaders Klarna, Clearplay, Laybuy and Openpay available on many retailers. Younger generations actually use it as an alternative to traditional debt and general consumers actually use BNPL when they don’t have access to traditional credit.
| Global e-com payment methods | ||
|---|---|---|
| 2020 | 2024 | |
| Digital/Mobile Wallet | 44.50% | 51.70% |
| Credit Card | 22.80% | 20.80% |
| Debit Card | 12.30% | 12.00% |
| Bank Transfer | 7.70% | 5.30% |
| Cash on Delivery | 3.30% | 1.70% |
| Charge & Deferred Debit Card | 3.30% | 1.60% |
| Buy Now Pay Later | 2.10% | 4.20% |
| Direct Debit | 1.20% | 1.00% |
| Prepaid Card | 1.10% | 0.50% |
| PostPay | 0.90% | 0.50% |
| PrePay | 0.40% | 0.20% |
| Other | 0.40% | 0.40% |
AliPay surpasses WeChat Pay, Apple Pay, Google Pay and PayPal in number of users
Mobile payments are used every day by millions of people, but some payment platforms have become more popular over the years.
With the introduction of an alternative payment environment, two of China’s ‘Big Tech’ players, Tencent and Alibaba, developers of WeChat Pay and AliPay, respectively, have revolutionised the payment industry in China.
According to Focus Finance, when Alipay introduced E-Wallets, that 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. It is no surprise that Alipay is at the top leading with 650 million users, 100 million more than its closest competitor, WeChat Pay.
| Number of users of leading mobile payment platforms worldwide 2022 | |
|---|---|
| Digital wallet | Users in millions |
| Alipay | 650 |
| WeChat Pay | 550 |
| Apple Pay | 507 |
| Google pay | 421 |
| PayPal | 377 |
| Paytm | 333 |
| PhonePe | 300 |
| Samsung Pay | 140 |
| Venmo | 52 |
| Cash App | 36 |
Digital wallets are the preferred method of payment
Merchant Machines analysis revealed contactless payments are among the preferred payment methods these days. The pandemic accelerated the decline of cash payments that occupied 20.5% of the global POS volume in 2020, and are predicted to fall to 12.70% in 2024.
At the point of sale, it can be said that mobile wallets have gained much of the share that cash has lost, and are expected to grow from 25.7% in 2020 to 33.40% in 2024.
The usage of credit cards (22.4%) and debit cards (22.3%) is predicted to stay more or less stable for the next two years at least. Card shares will remain stable at around 50% of worldwide POS transaction values through 2024.
| Global POS payment methods | ||
|---|---|---|
| 2020 | 2024 | |
| Digital/Mobile Wallet | 25.70% | 33.40% |
| Credit Card | 22.40% | 22.80% |
| Debit Card | 22.30% | 22.40% |
| Cash | 20.50% | 12.70% |
| POS Financing | 3.50% | 3.30% |
| Prepaid Card | 3.40% | 3.20% |
| Charge Card | 2.20% | 2.30% |
China leads as the most mobile-savvy Nations
Merchant Machine has analysed which countries have adopted mobile contactless payments on a large scale. It is estimated that 81.1% of Chinese citizens had adopted mobile wallets by 2019, while in 2021 these figures saw an increase to 87.3%.
The research revealed that in almost each country the adoption of mobile contactless has increased between the years of 2019 and 2021.
| Adoption of mobile contactless/tap to pay (%) | ||
|---|---|---|
| Country | 2019 | 2021 |
| China | 81.1 | 87.3 |
| Denmark | 40.9 | - |
| India | 37.6 | 40.1 |
| South Korea | 36.7 | 45.6 |
| Sweden | 36.2 | - |
| United States | 29 | 43.2 |
| Canada | 26 | 29.1 |
| Norway | 25.8 | - |
| Japan | 25.3 | 34.9 |
| Switzerland | 22.3 | - |
| Italy | 21.1 | 25.9 |
| Indonesia | 19.8 | 24.6 |
| Netherlands | 19.7 | - |
| United Kingdom | 19.1 | 24.4 |
| Australia | 18.8 | - |
| Finland | 17.9 | - |
| Russia | 17.2 | 21.1 |
| Spain | 16.5 | - |
| France | 15.6 | 21.1 |
| Argentina | 14.5 | - |
| Brazil | 14.5 | 20.7 |
| Germany | 12.5 | 19 |
| Mexico | 10.2 | 14.2 |
Google Pay is available in 143 Countries
Merchant Machines analysis revealed the countries that support Apple Pay, Google Pay and also Samsung pay.
Apple Pay is supported in 70 countries, whilst Google Pay in 143 and Samsung Pay is only supported in 15 countries.
As of October 2021, GooglePay had a 35 percent market share in terms of volume and a 38 percent market share in terms of value.
| Countries which support Apple Pay | Countries that support Google Pay | Countries that support Samsung Pay |
|---|---|---|
| South Africa | Albania | South Africa |
| Australia | Algeria | US |
| Taiwan | Angola | Canada |
| China mainland* | Antigua and Barbuda | China (Transit Only) |
| Singapore | Argentina | Spain |
| Hong Kong | Armenia | UK |
| New Zealand | Aruba | Singapore |
| Japan | Australia | Australia |
| Macao | Austria | Brazil |
| Armenia | Azerbaijan | Russia |
| Austria | Bahamas | Malaysia |
| Azerbaijan | Bahrain | UAE |
| Belarus | Bangladesh | Sweden |
| Belgium | Belarus | Switzerland |
| Bulgaria | Belgium | Italy |
| Croatia | Belize | |
| Cyprus | Benin | |
| Czech Republic | Bolivia | |
| Denmark | Bosnia and Herzegovina | |
| Estonia | Botswana | |
| Faroe Islands | Brazil | |
| Finland | Bulgaria | |
| France | Burkina | |
| Georgia | Cambodia | |
| Germany | Cameroon | |
| Greece | Canada | |
| Greenland | Cape Verde | |
| Guernsey | Chile | |
| Hungary | Colombia | |
| Iceland | Costa Rica | |
| Ireland | Cote d' Ivore | |
| Isle of Man | Croatia | |
| Italy | Cyprus | |
| Kazakhstan | Czech Republic | |
| Jersey | Denmark | |
| Latvia | Dominican Republic | |
| Liechtenstein | Ecuador | |
| Lithuania | Egypt | |
| Luxembourg | El Salvador | |
| Malta | Estonia | |
| Monaco | Fiji | |
| Montenegro | Finland | |
| Netherlands | France | |
| Norway | Gabon | |
| Poland | Georgia | |
| Portugal | Germany | |
| Romania | Ghana | |
| Russia | Gibraltar | |
| San Marino | Greece | |
| Serbia | Guatemala | |
| Slovakia | Guinea-Bissau | |
| Slovenia | Haiti | |
| Spain | Honduras | |
| Sweden | Hong Kong | |
| Switzerland | Hungary | |
| Ukraine | Iceland | |
| United Kingdom | India | |
| Vatican City | Indonesia | |
| Colombia | Iraq | |
| Mexico | Ireland | |
| Costa Rica | Israel | |
| Brazil | Italy | |
| Bahrain | Jamaica | |
| Israel | Japan | |
| Palestine | Jordan | |
| Qatar | Kazakhstan | |
| Saudi Arabia | Kenya | |
| United Arab Emirates | Kuwait | |
| Canada | Kyrgyzstan | |
| The United States | Laos | |
| Latvia | ||
| Lebanon | ||
| Liechtenstein | ||
| Lithuania | ||
| Luxembourg | ||
| Macau | ||
| Macedonia | ||
| Malaysia | ||
| Mali | ||
| Malta | ||
| Mauritius | ||
| Mexico | ||
| Moldova | ||
| Monaco | ||
| Morocco | ||
| Mozambique | ||
| Myanmar | ||
| Namibia | ||
| Nepal | ||
| Netherlands | ||
| Netherlands Antilles | ||
| New Zealand | ||
| Nicaragua | ||
| Niger | ||
| Nigeria | ||
| Norway | ||
| Oman | ||
| Pakistan | ||
| Panama | ||
| Papua New Guinea | ||
| Paraguay | ||
| Peru | ||
| Philippines | ||
| Poland | ||
| Portugal | ||
| Qatar | ||
| Romania | ||
| Russia | ||
| Rwanda | ||
| San Marino | ||
| Saudi Arabia | ||
| Senegal | ||
| Serbia | ||
| Singapore | ||
| Slovakia | ||
| Slovenia | ||
| South Africa | ||
| South Korea | ||
| Spain | ||
| Sri Lanka | ||
| Sweden | ||
| Switzerland | ||
| Taiwan | ||
| Tajikistan | ||
| Tanzania | ||
| Thailand | ||
| Togo | ||
| Trinidad and Tobago | ||
| Tunisia | ||
| Turkey | ||
| Turkmenistan | ||
| Uganda | ||
| Ukraine | ||
| United Arab Emirates | ||
| United Kingdom | ||
| United States (including Puerto Rico, American Samoa, Guam, Marshall Islands, Northern Mariana Islands, Palau and US Virgin Islands) | ||
| Uruguay | ||
| Uzbekistan | ||
| Venezuela | ||
| Vietnam | ||
| Yemen | ||
| Zambia | ||
| Zimbabwe |
Sources:
- https://www.statista.com/statistics/244501/share-of-mobile-phone-users-accessing-proximity-mobile-payments-country/
- https://support.apple.com/en-us/HT207957
- https://www.businessofapps.com/data/mobile-payments-app-market/
- https://www.statista.com/statistics/788318/worldwide-payment-technology-transaction-value-market-size/
- https://www.businessofapps.com/data/mobile-payments-app-market/
- https://www.businessofapps.com/data/mobile-payments-app-market/
- https://offers.worldpayglobal.com/rs/850-JOA-856/images/1149143_GPR_DIGITAL_ALL_PAGES_SINGLES_RGB_FNL8B.pdf?mkt_tok=ODUwLUpPQS04NTYAAAF7dBt8aCWlJSdupj5JiqwBi0LqoV7CKincHYtys2oqvJMMKE0DkZ6w5Ltqgy8hjPIMe8BOBe2rqkWpiRpqTZJ_jyjdjcld0JNuQ9zDAI2FADhyYJI
- https://www.adb.org/sites/default/files/publication/562156/adbi-wp1074.pdf
- https://www.samsung.com/in/support/mobile-devices/samsung-pay-what-is-it-where-is-it-and-how-to-use-it/#:~:text=Samsung%20Pay%20is%20compatible%20with,Pro%20and%20Galaxy%20J7%20Pro.
- https://support.google.com/googleplay/answer/2843119?hl=en#zippy=%2Cpaid-android-apps
- https://www.samsung.com/za/support/mobile-devices/how-many-countries-support-the-samsung-pay-service/
- https://support.apple.com/en-gb/HT207957
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