Mobile Wallets Are Accelerating The Path To Cashless Societies: Boku Report Reveals

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In 2019, mobile wallets overtook credit cards to become the most widely used
payment type globally with 2.8 billion people using mobile wallets today. A new report predicts that by 2025 nearly 60 per cent of the world’s population will use mobile wallets.

Fintech Boku, in partnership with analyst firm Juniper Research, has released its 2021 Mobile Wallets Report to provide insight into mobile wallet adoption and use in leading markets across the globe.

Back in 2019, mobile wallets overtook credit cards to become the most widely used payment type globally and the report reveals that the Coronavirus pandemic has only accelerated adoption further.

At the end of 2020, there were more than 2.8 billion mobile wallets in use. That number is projected to increase by nearly 74 per cent to reach 4.8 billion mobile wallets in use by the end of 2025. That’s nearly 60 per cent of the world’s population.

The number of mobile wallets transacting more than $1billion per year is set to grow by 27 per cent from 54 wallets in 2020 to 69 wallets by 2025. In several countries, wallets have been an important way in which regulators are striving to reduce the rate of cash usage.

The fastest growing markets are Southeast Asia, Latin America, and Africa & Middle East.  Here mobile wallets are displacing cash and cards for more convenient digital payments.

Highlights of the Boku report include:

Southeast Asia

Southeast Asia is the fastest growing mobile wallet region. Mobile wallet use is expected to grow 311 per cent between 2020 and 2025. That means there will be 439.7 million wallets in use across Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam by 2025.

The rise in e-commerce and popularity of super-apps, including Grab and Gojek in the Philippines and Indonesia, is driving accelerated mobile wallet adoption.

Far East and China

However, Far East and China is still the largest mobile wallet market, with WeChat Pay and Alipay accounting for a large number of users. China, Japan, Korea and Taiwan boasted 1.34 billion users in 2020.

While growth in China has largely plateaued, the emerging markets of the region are still experiencing hypergrowth.

Africa & Middle East

This is the second biggest mobile wallet market and predicted to grow by 147 per cent between 2020 and 2025. This is driven by expanded usage of mobile money services, such as M-Pesa.

Latin America

This region is set to increase mobile wallet use by 166 per cent between 2020 and 2025. Brazil has become the fintech hub for the region, with startups PicPay, Nubank and Pix all making headway.

Western Europe and North America

With 65 per cent growth in Western Europe and 50 per cent in North America by 2025, these regions will see the least amount of mobile wallet growth in the next five years. However, the UK has experienced a rise in card-based mobile wallets.

Rest of the world

Outside of Asia, Africa, the Middle East and Latin America, mobile payments are being dominated by
hardware-based, primarily NFC-device payments.

Meanwhile, the report describes Russia as the most promising mobile payments market in Europe. Mobile payments usage is projected to grow rapidly due to the combination of established payment types, smartphone penetration and e-commerce growth.

“The markets that are set to grow the fastest are those with the lowest levels of card penetration, stored value wallets are thriving,” ” said Adam Lee, chief product officer at Boku. “In North America and Western Europe, which are dominated by card-based mobile wallets, we are seeing the slowest growth in mobile wallet adoption, as the technology provides merely incremental benefit.

“While mobile wallets are being used on a global basis, we see two distinct types being used today. One is card-based mobile wallets, like Apple Pay and Google Pay, which provide an easier way to pay with cards people already have. The other is stored value mobile wallets, like AliPay and GrabPay, that enable consumers to transact with digital cash and are popular in emerging markets with fast growing eCommerce sectors.”

https://thefintechtimes.com/mobile-wallets-are-accelerating-the-path-to-cashless-societies-boku-report-reveals/