Mobile Wallet Adoption Rate to Increase to 75% by 2025

The global mobile wallet adoption rate is expected to witness an upward trend in the coming years amid an increase in the digital payment market through the usage of mobile payment wallets and contactless payments as an alternative to credit/debit card transactions on a global scale, says Beroe Inc.

The mobile wallet adoption rate in 2020, globally, was estimated to be 50-55% and is expected to increase to 75% by 2025, said the firm in a press release.

Beroe further stated that procurement experts can access this report on its recently launched market intelligence platform Beroe LiVE.Ai: https://www.beroeinc.com/beroe-live-ai/.

The Asia-Pacific is expected to witness the highest estimated adoption rate of 38-40% in the forecast period, followed by North America at 25-28%. Europe and Latin America are both expected to see an estimated adoption rate of 10-12%, while Africa and the Middle East will see the lowest adoption rate at 8-10%.

The demand for digital payment is high since the beginning of the pandemic. The major multinational banks are reducing their cash transactions and looking to increase the adoption of digital payments and deposits. As for the supply outlook, the cheque processing supply is medium-high as the number of providers offering digital payments has increased since the start of the Covid-19 pandemic. The merchants are looking to increase their digital payment adoption.

With the pandemic raging on, various sectors such as entertainment and those associated with the tourism industry such as airlines and hotels have observed a global decline in global digital payments' volume. As a direct consequence of the pandemic, business-to-business or customer-to-business-based payments across borders have also declined significantly owing to the temporary shutdown of borders. Global remittances have also been affected negatively.

On the other hand, with governments announcing lockdowns in a bid to contain the spread of Covid-19, clients are mostly transacting through digital banking, thereby increasing the usage of digital payments. The social distancing and other pandemic mitigation measures are likely to boost demand for digital banking services and this may also force traditional payments, like cheque processing, to be less adapted.

As of 2020, 15.85% of U.S. smartphone owners have used proximity mobile payment services and the most common mobile in-store mobile payment method was barcode or QR code scanning. Among these, a further 15% of customers had waved or tapped their mobile phone to pay at check out.

North American millennials (28%) and high-income households (42%) use contactless payments at least once a week, making them the largest adopters of digital payments. Furthermore, within the North American region, 55% of them are "extremely aware" of mobile payments, only 22% use them on a regular basis.

Key Findings:

• Almost 82% of banking executives are expecting to increase FinTech partnerships in the coming 3-4 years.
• FinTech will offer banks a quick way to test and launch innovative services without completing their costly IT systems, while banks offer financial capital, an expanded customer base, and an imprimatur of greater legitimacy.
• Digital channels handling more multiples of transaction volume than as anticipated, latency could increase, potentially resulting in time out and lost sales.
• The sectors that have seen an increase in digital payments by way of increased adoption during the lockdown include online grocery stores, online pharmacies, OTT players (telecom and media), EdTech, recharges, and utility bill/payments.
• It has been observed that from the start of the Covid-19 pandemic, the demand for digital payments has increased globally.
• Due to the ongoing pandemic, the demand for digital payment has increased as most of the clients are transacting through digital banking for low as well as high-value transactions.
• It has been observed that globally the supply for digital payment has been stable and companies are looking to adapt to digital payments.