Digital wallet transactions will reach $9 trillion by 2024: Exploring the forces driving this spend
The benefit of a digital wallet is that, for both online and offline transactions, it enables the wallet user to easily make secure, quick transactions, thereby removing the requirement for a plastic card -- or the need to enter bank account details for every online purchase.
For the 'unbanked' populace across the globe, the availability of a digital wallet and cryptocurrency on a mobile phone will provide a means of financial inclusion, both as an alternative to cash payments and as a way of accessing services such as personal loans and savings accounts.
Digital wallet market development
For the savvy digital wallet provider, the fintech revolution in online payments and person-to-person remittance has enabled several new players to achieve a growing presence across the global financial services and retail ecosystems.
In some cases, this transition enables vendors to provide offline or online payments on their own and via third-party storefronts, together with consumer loyalty programs, bill payments and other financial transactions.
According to the latest worldwide market study by Juniper Research, the number of people using digital wallets will increase from 2.3 billion in 2019 to nearly 4 billion -- that's ~50 percent of the world’s population -- by 2024. This will push digital wallet transaction values up by more than 80 percent to about $9 trillion per year.
New growth is expected to be fueled by online payments for remote purchases. The study found that increases here would be driven by a greater volume of transactions conducted via stored credentials. For example, in the U.S. market, annual spend per digital wallet is expected to increase from around $3,350 this year to more than $6,400 by 2024.
Furthermore, Juniper believes that usage would be boosted by the increased security for online payments afforded by the introduction of Secure Remote Commerce (SRC) standards during the second half of 2019, with transactions protected via tokens and dynamic cryptograms.
Meanwhile, the ongoing challenge posed to NFC-based contactless wallets by the emergence of digital wallets based on QR codes means that growth may be boosted by the implementation of EMVCo standards.
However, Juniper believes that the primary opportunities for QR code wallets outside their Chinese heartland will occur in developing Asia, where there is a scarcity of POS infrastructure and merchants can use smartphones to fulfill QR-based transactions.
Outlook for digital wallet growth opportunities
The market study findings also enabled the comparative assessments of 14 national and 22 international digital wallet offerings, combining analyses of product range and banking partnerships with customer feedback to gauge their growth prospects.
"The Juniper Innovation Index and Leaderboard enable us to see at a glance precisely where these wallets are positioned relative to one another and how well placed they are to capitalize on the opportunities afforded to them," said Dr Windsor Holden, head of forecasting and consultancy at Juniper Research.
Interested in hearing industry leaders discuss subjects like this? Attend the co-located IoT Tech Expo, Blockchain Expo, AI & Big Data Expo, and Cyber Security & Cloud Expo World Series with upcoming events in Silicon Valley, London, and Amsterdam.
- » KT and Samsung to develop 5G-powered medical service
- » Five major US telcos are vulnerable to 'SIM swapping' attacks
- » IDC shows how 5G use case development will drive further adoption
- » How 5G technology will continue to evolve mobile voice services
- » Telefonica launches blockchain pilot in APTE partnership – reports