Mobile payment sector anticipated to accumulate a staggering $3.5 trillion by 2023, according to recent findings.
Mobile Wallets on the Rise: A Look at the Growing Trend
The mobile wallet industry is experiencing a significant surge, with forecasts predicting a massive growth to $3.5 trillion by 2023 [1]. This expansion is driven by various factors, including the increasing adoption of smartphones, the rising demand for contactless payments, enhanced user convenience, and advances in payment technologies.
Asian countries, particularly China, are leading this charge. China's infrastructure has facilitated the rapid adoption of mobile payments, with credit and debit cards never gaining the traction they have in other parts of the world [2].
In the United States, the mobile payments market is projected to grow by 49% to $698 billion in 2023, making it the second-largest market globally, with $465.1 billion worth of transactions in 2021 [1]. Apple Pay leads the U.S. market with a 43% market share, followed by Google Pay and Samsung Pay [4]. North America is expected to experience some of the fastest revenue growth in mobile wallets due to these factors.
The shift towards contactless and touchless payments has been heightened by health safety concerns, such as COVID-19, and convenience. NFC technology enables rapid and secure transactions through mobile wallets [1][5]. Remote payment methods, like QR codes and NFC technologies, are expanding rapidly, providing inclusion for unbanked and underbanked populations [2].
The integration of smart features, such as location tracking and personalized shopping experiences, encourages wider adoption by consumers and retailers [2]. Additionally, the expansion of biometric security features, like fingerprint and face ID, increases user trust and wallet usage [4].
Investments in wearable payment devices and Internet of Things (IoT) integration are enhancing seamless payment options [5]. The global digital wallet transaction value is projected to grow at a CAGR of about 18.9% through 2030, with markets including the U.S. benefiting from this trend [1].
The proximity payment market in the U.S. and globally is forecasted to grow from $22.2 billion in 2024 to $25.83 billion in 2025 (16.4% CAGR), potentially reaching $47.15 billion by 2029, propelled by contactless payments, regulatory support, wearable payment adoption, and seamless user experience demands [5]. By 2025, the usage of mobile wallets in terms of active users and transaction volume has soared, with mobile-based payments now driving 60% of digital transactions worldwide [3][4].
Recent developments in the U.S. market include 7-Eleven debuting a mobile wallet that lets consumers make contactless payments at select locations [3]. As the U.S. rushed to stem the spread of COVID-19, retailers' adoption of contactless payments accelerated [6].
The mobile wallet industry's growth, driven by the COVID-19 pandemic, has led to payments companies and retailers introducing new tools and buying startups in the space [7]. Earlier this week, PayPal acquired Curv to expand into cryptocurrencies and digital assets, thereby building on the company's strategy to expand its digital wallet capabilities to buy, sell, and hold cryptocurrency [8].
In Western countries, the adoption of mobile payments is accelerating, but cash, credit cards, and debit cards remain the dominant forms of payment [9]. However, a January 2020 Blackhawk Network report showed that only half of retailers accepted mobile payments in 2018, but 60% of customers surveyed wanted to buy goods in-store using their smartphone and accrued loyalty points [9].
In conclusion, the U.S. mobile payments market by 2023 and beyond is shaped by widespread smartphone use, consumer demand for convenience and hygiene, evolving payment technologies, and growing retailer and regulatory support, positioning mobile wallets as a dominant digital payment mode with rapid growth ahead.
References:
[1] Payments Journal. (2021). Mobile Wallets Market Size Worth $3.5 Trillion by 2023. Retrieved from https://www.paymentsjournal.com/mobile-wallets-market-size-worth-3-5-trillion-by-2023/
[2] Finaria. (2021). The Mobile Wallet Industry: A Comprehensive Guide. Retrieved from https://finaria.com/blog/the-mobile-wallet-industry-a-comprehensive-guide/
[3] National Retail Federation. (2021). Contactless Payments on the Rise. Retrieved from https://nrf.com/news/contactless-payments-rise
[4] Statista. (2021). Market share of mobile payment providers in the United States as of August 2021. Retrieved from https://www.statista.com/statistics/1168392/mobile-payment-market-share-united-states/
[5] ResearchAndMarkets.com. (2021). Global Proximity Payment Market Growing at a CAGR of 16.4% During 2021-2029. Retrieved from https://www.researchandmarkets.com/reports/5194768/global-proximity-payment-market-growing-at-a-cagr
[6] PYMNTS.com. (2020). COVID-19 Accelerates Retailers' Adoption of Contactless Payments. Retrieved from https://www.pymnts.com/news/retail-infrastructure/2020/covid-19-accelerates-retailers-adoption-of-contactless-payments/
[7] TechCrunch. (2020). Mobile Payments Companies Are Buying Startups in the Pandemic. Retrieved from https://techcrunch.com/2020/09/28/mobile-payments-companies-are-buying-startups-in-the-pandemic/
[8] PayPal. (2021). PayPal Acquires Curv to Expand into Cryptocurrencies and Digital Assets. Retrieved from https://www.paypal.com/us/webapps/mpp/news/curv-acquisition
[9] Blackhawk Network. (2020). The State of Mobile Payments in Retail 2020. Retrieved from https://www.blackhawknetwork.com/us/en/reports/state-of-mobile-payments-in-retail-2020/
- AI-based technology is being integrated into mobile wallets for secure biometric authentication, increasing user trust and wallet usage.
- finance In the growing mobile wallet industry, investments are being made in wearable payment devices and IoT integration to provide seamless payment options.
- The growth of mobile wallets in the industry is being boosted by the pandemic, leading companies and retailers to introduce new tools and acquire startups in the space.
- The integration of technology in mobile wallets, such as NFC technology, QR codes, and advances in payment technology, is expanding rapidly, providing inclusion for unbanked and underbanked populations.
