The entire sector boomed amid the pandemic as people started questioning the safety of using banknotes for fear of transmitting the virus
The global shift towards a cashless society created a huge space for mobile wallets as a safer and more convenient way of managing money. According to data presented by TradingPlatforms.com, digital or mobile wallet payment was the most used point of sale payment method globally, with a 21.5% market share in 2020. By 2024, mobile wallets are set to become even more popular, making one-third of all POS transactions worldwide.
Digital transactions rise, cash payments continue to drop
Over the last few years, mobile payment services provided hundreds of millions of people access to electronic transactions, especially in underbanked markets in Africa, Asia and Latin America. However, they also become very popular among tech-savvy consumers in developed countries.
The digital transformation of the global payments industry, fuelled by the COVID-19, led to the impressive growth of the entire mobile wallets market. Over the last two years, the transaction value of the entire sector doubled and is expected to hit nearly $2.5trn in 2021. The number of people using mobile wallets to make payments surged from around 900 million to 1.48 billion in this period.
In 2020, 25.7% percent of all POS payments were made using mobile wallets, revealed the Global Payments Report 2021. By 2024, this figure is expected to jump to 33.4%.
The survey also revealed that mobile payments made 44.5% of all eCommerce transactions last year, two times more than credit cards and three times more than debit card payments.
Credit cards and debit cards are expected to hold the same market share in the next two years, making around 22% of POS payments each. However, cash transactions are set to witness a significant drop, falling from 20.5% in 2020 to 12.7% in 2024.
Mobile wallets to become $4T worth industry by 2024
Generally, the mobile wallets market is dominated by Asian countries, spearheaded by China as the global leader. According to the Statista survey, the transaction value of the Chinese mobile payments market is forecast to reach $1.3trn in 2021. By 2024, this figure is set to jump to over $1.8trn, or 45% of all mobile wallet payments globally.
Western countries are far behind in terms of usage, with many people still preferring cash, credit, and debit cards. The US ranks as the world’s second-largest mobile payments market, with $468bn worth of transactions or nearly three times less than China. However, statistics show the US market is set to witness impressive growth in the following years, with transaction value growing by 80% to $840.7bn in 2024.
The United Kingdom is the third-largest mobile wallets market globally, expected to reach $97.6bn transaction value in 2021, a 43% increase in a year. By 2024, mobile POS payments in the country are expected to grow by another 92% and hit a $187.7bn value.