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According to the 2023 version of The Global Payments Report by Worldpay, digital wallets are both the world’s dominant payment method, and its fastest-growing.
While debit and credit cards continue to see increased usage, their overall share of payments is projected to decline given recent rapid growth in wallet use.
“Globally, digital wallet use is projected to grow at 15% annually at the point of sale, making wallet acceptance a must-have for all consumer-facing verticals.”
Digital wallets have been the payment method of choice in China for some time now, and they command an 81% market share of that country’s e-commerce market, according to The Global Payments Report.
However, the 2023 Report notes that digital wallets have also been the preferred method for online payments in Europe since 2021, and in North America since 2022.
Furthermore, they are now the leading e-commerce payment method in major Asian economies such as India, Indonesia, the Philippines and Vietnam.
Powered by wallets from banks, government-led initiatives such as UPI in India and big tech wallets such as Apple Pay and Google Pay, Worldpay project digital wallets will see growth of 15% at POS globally each year between 2022 and 2026.
In their report, Worldpay from FIS state that digital wallet acceptance should be seen as a “must have” for all merchants.
Globally, Worldpay from FIS project market share for digital wallets growing from 49% to 54% of e-commerce value to 2026, and from 32% to 43% at POS over the same period.
Card use still growing as market share declines
Although both credit and debit card growth continues as consumers embrace electronic payments over cash, their market share relative to digital wallets is set to decline through 2026, according to The Global Payments Report 2023.
“With digital wallets growing three times faster than cards, market share for cards will decline through 2026.”
Credit card value topped $13 trillion globally in 2022, rising 6% online and 12% at POS compared to 2021.
However, with growth in credit card value predicted to be just 4% compared to 15% for digital wallets, credit cards’ overall market share in online payments by value is projected to decline from 20% to 16% by 2026, and from 26% to 24% at POS.
Likewise, Worldpay see debit cards use declining from 12% to 10% of e-commerce value over the next three years, and from 23% to 19% when used in-store.
One driver for increased card use is the fact that both credit and debit cards are among the leading methods for consumers to fund their digital wallets.
The Global Payments Report 2023 indicates that, while 34% of consumers globally fund their wallets using bank accounts, debit cards (27%) and credit cards (22%) are their second and third methods of choice for wallet funding.
More broadly, Worldpay from FIS report that the use of alternative credit methods such as Buy Now, Pay Later (BNPL) and POS financing will continue to grow, albeit more slowly than the use of credit cards: BNPL will see a slight increase in e-commerce market share, from 5% to 6% by 2026, with POS financing set to maintain a share of 2% over the forecast period.
For more on the rise of digital wallets and card payments, download The Global Payments Report HERE
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