The embracing of e-wallets, aka digital wallets, has opened the door for a new and unparalleled change in the worldwide payment industry. These advanced payment means allow customers to safely stock and use their credit and debit card data, alongside numerous other payment solutions, remotely or locally, and most importantly, electronically. The outcome has represented an astronomical spike in the number of consumers shifting to e-wallets for their recurrent purchases and transactions. More precisely, if in 2022, over 42.6% of the globe’s population had a digital wallet, this year, around 53% of owners use their wallets instead of the conventional payment methods we’ve been accustomed to. Retailers and e-wallet solution providers are jumping on the trend. The worldwide digital wallet market size was approximated at $6.2BN in 2021 and is projected to grow at a CAGR of 27.4% from the subsequent year to the decade’s end.
The debut of digital wallets and points-of-sale kiosks harbingered what turned out to be a global phenomenon, paving the path for technologies like blockchain to intertwine with existing technologies and lead to new financial products. Weren’t it for the digital wallet, Bitcoin, the world’s largest digital currency, wouldn’t have given way to the blockchain developments existing today. Picture this: the dizzying surge to popularity laid the foundation for new financial tools to invest in, like non-fungible tokens and crypto-based exchange-traded funds. It’s for these reasons and more that investors keep a close eye on the current Bitcoin price prediction to gain an insight into the market’s possible future price movements and financial trends.
Now, most people believe that digital wallets will soon make traditional payment solutions redundant, all the more since nations launch their own digital currencies and the cashless trend takes over the retail landscape. Let’s delve into the journey of e-wallets to global prominence, as well as the consumer and merchant advantages of digital wallets.
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The rising adoption of e-wallets
A few crucial milestones have set the foundation for the development of e-wallets, such as PayPal’s launch in 1999 and its rapid rise in popularity. Alibaba presented Alipay in China four years later, being followed by Kenya’s M-PESA, which was particularly helpful for unbanked communities. In 2009, the world saw Bitcoin’s launch, which ushered in the concept of decentralized digital payments and set the stage for the global phenomenon that the crypto wallet was about to become. Apple’s and Google’s wallets followed in their precursors’ footsteps, leading to the pile of e-wallets at everyone’s disposal and the massive shift to online payments.
What e-wallets represent for retailers
Retailers are making the most of the spiking adoption of e-wallets, such as the possibility of improving sales by streamlining customers’ purchasing process. This perk is specifically attractive for small and medium-sized businesses (SMBs), which, in the U.S., represent over 99% of the total of ventures. The focus lies on those lacking the necessary resources to funnel expensive payment solutions.
The digital wallet’s prominence across Asia and Africa
In Asia, e-wallets like WeChat Pay and Alipay are all the rage. The former is part of a trendy messaging application, namely WeChat, and enables users to make payments, send and receive money, and pay bills. Alibaba is among the most employed e-wallets and permits customers to make in-store and online payments, besides transferring money. Millions of ventures, from big retailers to street vendors, employ these solutions. Pay Pay and Line Pay are famous apps in Japan, while Singapore and Malaysia leverage Grab Pay. South Korea, on the other hand, uses Kakao Pays, the most downloaded application in the Google Play store and Apple Store across the country.
India witnessed an astronomical expansion in the embracement of e-wallets, with numerous alternatives within reach to customers. PhonePe, ICICI Pockets, PayTM, Amazon Pay, and Google Pay are some of the hottest digital wallet apps of the moment across the country, and trends like this suggest the nation’s rising appetite for digital financial services. The list doesn’t end here – from Ghana’s Mobile Money to Zimbabwe’s EcoCash to Kenya’s M-Pesa, the growing dominance of these payment solutions discloses the potential of this payment industry alongside the rising need for them.
E-wallets’ prevalence across Europe
In Europe, e-wallets like Samsung Pay, Apple Pay, and Google Pay are the fundamentals of mobile payments. Apple Pay, for instance, enjoys massive popularity for in-store acquisitions across most European nations, with usage rates standing between 30% and 67%, according to Statista’s 2024 report. At the same time, Samsung Pay has more than 50MN active users globally and is taken by 30MN merchants. Nevertheless, when it comes to online shopping, consumers are less likely to use it (15% to 40%), possibly because other advantageous payment methods exist, like Visa and Mastercard. These two options are the top non-domestic credit cards used across European states. In contrast, cards like Diners Club and American Express barely register statistically, making little to no impact.
E-wallet usage across the U.S.
In the U.S., besides the two evident rulers – Google and Apple Pay – e-wallets like Square Cash, Venmo, and PayPal are used everywhere. The latter is among the most mature and prominent e-wallets nationwide, enabling users to carry out online payments, send and receive money, and store debit and credit data. On the other hand, PayPal’s Venmo is the e-wallet more prevalent among Zoomers and the younger generations, enabling users to instantly carry out payments and transfers. This digital wallet brings something new to the table, namely the permission to share payments with friends.
So, what’s in for retailers?
Among the most significant advantages of e-wallets is their unmatched convenience. One no longer needs to carry plastic cards and wallets; every payment’s data is safely stored within the e-wallet. Such convenience makes it easy for buyers to acquire things both in store and online through their smartphones, moreover enjoying faster and simpler payments, removing the need to input payment data with every transaction recurrently.
Besides this, e-wallets add enhanced security features. Conventional payment methods, like debit and credit cards, may be vulnerable to security breaches and fraud, but e-wallets use state-of-the-art security tools, including 2FA and encryption, that add an extra layer of safeguarding, bringing buyers unparalleled peace of mind.
