Digital wallets are the primary payment choice for people in e-commerce, and in the past year, they accounted for 50% of global spending (> US$ 3.1 trillion) and 30% of global point-of-sale spending (> US$ 10.8 trillion). Still the fastest-growing payment method worldwide, by 2027 digital wallets are expected to account for more than $25 trillion in global transaction value (49%) in e-commerce and point-of-sale. The information is from the new study conducted by Worldpay, LLC®, a global leader in payment solutions, the "The Global Payments Report 2024".
The report is in its 9th edition and provides a mapping of 40 markets that represent 88% of the global Gross Domestic Product (GDP). Developed in 5 regions of the world, the study highlights not only the current landscape of payment methods worldwide but also addresses projections for the next four years.
With exponential growth, digital wallets have already become the preferred payment method in Asia, Europe, and North America. By 2027, this method is expected to lead e-commerce payments in all regions of the world.”, says Juan Pablo D'Antiochia, Worldpay Senior Vice President for Latin America.
- E-commerce: US$ 3.1 trillion
- Point of Sale: $10.8 trillion
- Total of US$14 trillion
Growth forecast for digital wallets between 2023-2027:
- E-commerce: 15% CAGR (Compound Annual Growth Rate)
- Point of Sale: 16% CAGR (Compound Annual Growth Rate)
But what are digital wallets?
Digital wallets are applications that securely store payment credentials, allowing consumers to pay for goods and services online and in physical stores in a simple, fast, and secure manner. Worldpay's classification broadly includes pass-through digital wallets that facilitate card transactions, stored value wallets, and mobile money wallets, and includes global brands such as Alipay, Apple Pay, Google Pay, M-Pesa, and PayPal, as well as local and regional digital wallets. In 2023, digital wallets accounted for 50% of global e-commerce spending (> US$ 3.1 trillion) and 30% of global point-of-sale spending (> US$ 10.8 trillion).
Latin America – Highlights in payment methods:
Argentina leads the region in e-commerce payments with digital wallets – nearly twice as many transactions as Brazil; and cash is the most used method at points of sale. In the last year, 31% of e-commerce transactions were carried out through this method in Argentina. In Brazil, the number is 16%.
Chile has one of the lowest unbanked rates in Latin America, with the World Bank reporting that 87% of surveyed Chilean consumers (2021) had some type of financial account. This strong financial inclusion helps differentiate the country in the use of debit cards – today, the main online payment method (31%) and in point-of-sale transactions (37%).
· In Colombia, “A2A” (Account to Account) payments represented 25% of the value of e-commerce in 2023, and are expected to grow at a 20% CAGR between 2023-2027.
In Mexico, A2A growth forecast at 19% CAGR from 2023-27 would see the share of this payment method increase from 6% to 8% of online spending, depending on consumer choice in a historically very stable market.
· Mexico’s central bank, Banxico, is making its second attempt to create a successful consumer-facing real-time payments system.
In March 2023, Banxico launched DiMo (Dinero Móvil), an A2A service that operates on SPEI, Mexico's real-time gross settlement system. DiMo has an improved user experience, and although bank participation is not mandatory, the country's main banks and financial service providers seem enthusiastic about the new scheme. While CoDi used QR codes, DiMo is based on phone numbers.
Global – Highlights
Digital wallets lead e-commerce in Europe overall, and in five markets (Denmark, Germany, Italy, Spain, and the United Kingdom). Representing 30% of the transaction value in e-commerce in 2023, they are expected to grow by 17% CAGR until 2027, when they will account for approximately 40% of the e-commerce value.
· Digital wallet adoption is accelerating at POS in Europe.
Debit cards are overwhelmingly preferred by Europeans at POS and will account for 41% of the value transacted at POS across Europe in 2023 – over $2.7 trillion (almost double the share of credit cards at 21%).
