According to a survey by mobile payments provider Boku, more than one in every two individuals would use a mobile wallet by 2025, as cash is increasingly displaced.
This means that the number of active mobile wallets worldwide will expand from 2.7 billion to 4.8 billion in the next four years.
Southeast Asia is leading the way in this shift, with a 25.5 percent compound annual growth rate (CAGR) and 311 percent predicted overall growth in the next five years.
The emergence of e-commerce and the dominance of super-apps like Grab and Gojek – especially in places like the Philippines and Indonesia – are just a few of the factors driving wallet adoption in the area.
Latin America, Africa, and the Middle East are close behind in terms of places where wallets provide access to financial services for the unbanked. By 2025, these two regions are expected to increase their use of mobile wallets by 166 percent and 147 percent, respectively.
The increased use of mobile money services such as M-Pesa, which provide enhanced access to e-commerce, is catalyzing adoption throughout Africa and the Middle East.
However, wallet adoption is slower in Western Europe and North America, with 65 percent and 50 percent, respectively, by 2025. This is due to strong card penetration and contactless usage at physical retail locations.
Nonetheless, due to the pandemic-driven uptake of contactless, markets such as the United Kingdom are seeing a surge in card-based mobile wallets. Boku believes that by 2025, three-quarters of Europeans will be utilizing a digital wallet as a result of changes like this.
According to Jon Prideaux, CEO of Boku, “we are witnessing a paradigm shift in payments driven by mobile wallets.” “Mobile wallets have cut the barrier to making digital payments, bringing billions of new customers into e-commerce for the first time. These customers aren’t from North America or Western Europe; they’re from developing countries, and while they don’t have credit cards, they rely heavily on mobile wallets. Accepting mobile payments is not about accepting one sort of mobile wallet over another for global businesses; it’s about ensuring that consumers in every market have the payment types they need to monetise transactions.”
Boku’s news comes after an exciting week in Europe’s mobile wallets industry, which saw Vipps, MobilePay, and Pivo unite to battle against Alipay, Apple, and Google.