Skyrocketing Mobile Wallet Market Forecasted to Reach an Impressive $3.5 Trillion by 2023, According to New Analysis
Mobile Wallet Industry Experiences Rapid Growth Worldwide
The mobile wallet market has experienced impressive growth in the last year, both in the number of users and transaction value, according to a report by Finaria. This growth is largely due to a combination of factors, including the widespread adoption of smartphones, mobile-first consumer behavior, government-backed digital payment systems (especially in Asia), integration of mobile wallets with popular apps, and innovations like contactless payments and biometric security.
In contrast, mobile payment adoption in Western countries is moving at a slower pace. This can be attributed to the existence of well-established digital payment infrastructures (e.g., credit/debit cards), lower dependency on mobile-first solutions, and consumer preferences shaped by existing payment habits and trust issues.
Asia, particularly China, is leading the way in mobile payments. China's infrastructure facilitated the rapid adoption of mobile payments, with credit and debit cards never gaining significant traction. In India, government-backed UPI (Unified Payments Interface) has been key to rapid digital wallet adoption, with PhonePe and Paytm leading. China’s mobile wallets such as WeChat Pay and Alipay hold dominant market shares due to their integration into social and e-commerce platforms.
In Western markets, the U.S. leads mobile wallet usage with Apple Pay (43%), Google Pay, and Samsung Pay. However, growth is comparatively slower due to entrenched credit/debit card use and consumer habits. Security features including biometric authentication have helped overcome some trust barriers, but Western adoption still lags behind Asia’s mobile-first regions.
The U.S. mobile payments market is projected to grow by 49% to $698 billion in 2023, and the mobile wallet industry is forecasted to grow to $3.5 trillion in value by 2023. The growth in mobile payments worldwide is linked less to just replacing cash and more to embedding payments into consumer and business workflows via apps and services, which are more widespread in emerging markets.
In response to the COVID-19 pandemic, retailers' adoption of contactless payments accelerated in the U.S. An August survey from the National Retail Federation found that retailers are increasingly accepting contactless payments and expect greater adoption of the technology in the future. However, specific details about the challenges faced by retailers during the 2025 holiday season were not provided.
In January 2020, only half of retailers accepted mobile payments, but 60% of customers wanted to buy goods in-store using their smartphone and accrued loyalty points, according to a report from Blackhawk Network. As of April 2020, consumers weren't using mobile wallet apps as much as expected, according to a report from PYMNTS.com.
Recently, 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. In December, 7-Eleven debuted a mobile wallet that lets consumers make contactless payments at select locations.
In conclusion, the rapid mobile wallet growth in Asia and certain emerging markets is driven by a mobile-first population, supportive government initiatives, and ecosystem integration, while in Western countries, established payment methods and consumer habits slow mobile payment adoption despite growing interest and technological improvements.
Financial analysts predict a significant surge in the mobile wallet industry, with the global market projected to reach $3.5 trillion by 2023. This growth is attributed to the pandemic-induced acceleration of contactless payments, the proliferation of smartphones, and the integration of mobile wallets with popular apps.
The AI-driven digital transformation in banking and insurance, termed Fintech, is propelling the integration of financial services into gadgets like smartphones. This shift is most discernible in Asia, where China leads mobile payments, with platforms like WeChat Pay and Alipay dominating the market.
Experts believe that the U.S. will catch up, with the market projected to grow by 49% to $698 billion in 2023. Companies like PayPal are making moves to expand into cryptocurrencies and digital assets, indicating a shift towards a more technologically progressive financial ecosystem.
On the other hand, Western countries exhibit a slower adoption rate, with established payment methods like credit and debit cards hindering the progression of mobile payments. Despite this, there is growing interest in mobile wallets, with consumers desiring to use their smartphones for in-store purchases and loyalty programs.
Government-backed digital payment systems, such as UPI in India, have played a crucial role in the rapid adoption of mobile wallets in certain regions. Yet, concerns about trust and consumer habits continue to pose challenges for the mobile payment industry in Western countries.
In the editorial sphere, technology journalists are closely monitoring the intersection of tech, AI, space, and finance, as they contribute to the evolution of the mobile wallet industry and the future of digital payments worldwide.
