Leading the way forward, fintech vendors have offered a variety of digital payment solutions across regional financial service markets. Plus, due in part to the disruptive COVID-19 global pandemic, and the move away from cash-dependent payment methods, digital wallets are now gaining broad adoption.
According to the latest worldwide market study by Juniper Research, the number of unique digital wallet users will exceed 4.4 billion globally in 2025 — rising from an estimated 2.6 billion in 2020.
Juniper analysts found that mobile phone wallets are driving this impressive 70 percent growth, as fintech mobile app payments rapidly scale across geographical and vertical industry markets.
Digital Payment Market Development
Furthermore, the increasing alignment between in-person and remote commerce channels is leading to greater use of smartphone app wallets, with web app wallet use confined to high-value purchases or complex bill payments.
Juniper Research recommends that retailers and other merchants should undertake complete reviews of their eCommerce processes to ensure that they’re offering a highly capable mobile app solution.
This solution must be inclusive of a streamlined checkout process, the correct mobile wallet integrations, and bullet-proof security, or they will lose out to more mobile-savvy digital organizations.
The new research found that traditional developed markets — such as the UK and U.S. regions– are clearly lagging behind global leaders such as China and India, in terms of digital wallet adoption.
With China and India now forecast to account for 69 percent of digital wallet transactions in 2025, it’s hard to imagine that the Western European and North American market growth trajectory can compare.
“In developed markets, mobile wallets facilitate card payments, but in emerging markets, wallets in places have bypassed cards entirely. Wallet providers in developed markets need to focus on building acceptance and analytics features, in order to boost their appeal in a card-centric environment,” said Nick Maynard, lead analyst at Juniper Research
Juniper analysts also found that QR code payments will account for 40 percent of all digital wallet transactions globally in 2025 — that’s an apparent fall from 47 percent of transactions in 2020.
Meanwhile, QR code payments are presently still playing a leading role, due to their ease-of-use and acceptance, which makes them a critically important area for continued digital wallet use.
Outlook for Digital Payment Applications Growth
However, according to the Juniper assessment, over the next five years, the evolution of features such as card acceptance via near field communications (NFC) enabled smartphones will begin to close the ‘ease of acceptance’ gap.
I believe that digital wallets benefit the providers’ own storefronts and third-party storefronts, together with retail consumer loyalty programs, online bill payment options, and mobile banking services.
Furthermore, digital wallet payment technology has evolved to the point where they make use of a variety of different payment technologies. Therefore, the upside revenue growth opportunities are likely to blossom across the globe.