Total spend via digital wallets will exceed $10 trillion in 2025, up from $5.5 trillion in 2020, a new study from Juniper Research shows.
The research found this dramatic 83% growth in spend will be fuelled by the heightened adoption of digital payments during the pandemic. Digital wallet or e-wallet refers to software, an electronic device, or an online service that enables individuals or businesses to make transactions electronically. By using a digital wallet, users can complete purchases easily and quickly with near-field communications technology.
The report identified that wallets are becoming increasingly capable of both contactless and remote payments. The research forecasts that in 2025, contactless and eCommerce payments will account for 50% of total wallet spend, from just under 36% in 2020; making these the high-priority areas where wallet providers need to maximise their merchant networks.
The new research, Digital Wallets: Key Opportunities, Vendor Analysis and Market Forecasts 2021-2025 Market Research, found that the rapid growth in digital wallets availability, coupled with rising adoption, has left merchants with difficult decisions around acceptance. Integration costs for multiple wallets as challenging for merchants; meaning that picking the right wallets to focus on is highly important, the report noted.
Alexandria Sadler, the research co-author, expantiate that, merchants must base their payment strategies around wallet acceptance in order to support a digitally-engaged addressable market, but must also judge the right wallets to target, or they will be lumbered with increased costs and limited benefits.
Further more, the research also found that the increased use of contactless mobile payments during the pandemic, prompted by concerns around cash, has seeded greater wallet use across the payments’ ecosystem. Contactless adoption will rise, with over 34% of mobile handsets set to use contactless payments in 2025, up from 11% in 2020, the report predict. However, this growth means integrating contactless-enabled wallets within checkout processes will be critical to meeting changing user expectations.