While some people are busy asking whether we’re seeing the death of cryptocurrencies, a new report says 60% of us will be using digital wallets by 2026.
Digital Wallet Usage Driven By ‘Superapps’
A Juniper Research study says that the presence of ‘superapps’ will drive digital wallet use in developing countries that are currently considered cash heavy. Juniper describes superapps as “multipurpose apps able to integrate digital payments alongside other services, including wealth management and eCommerce.”
Examples could be WeChat and AliPay (China). WeChat, for example, started as a messaging app, then widened its services to add gaming, shopping and payments. WhatsApp looks likely to follow a similar road.
Digital Wallet Providers
Examples of some of the leading digital wallet providers are PayPal, Alipay, WeChat Pay, Apple Pay and Google Pay.
The Juniper report says that the total number of digital wallet users will exceed 5.2 billion globally in 2026, up from 3.4 billion in 2022. If the prediction is correct, this will represent strong growth of over 53 percent.
Rapid Growth For Asia Pacific Region
Juniper’s report also says that the Philippines, Thailand, and Vietnam are primed for rapid growth over the next four years due to the rising access to online and mobile commerce services driving an increase of digital wallets, notably through superapps. The report estimates that the adoption of digital wallets will near 75 percent of the population in each of these countries by 2026!
QR Code Payments
QR code payments are predicted by Juniper’s report to be the most popular digital wallet transaction type in 2026; reaching 380 billion transactions globally, and accounting for over 40 percent of all transactions by volume.
However, the report recommends that QR code payment vendors need to innovate to remain competitive entering new geographic markets by integrating loyalty features and personalised marketing capabilities. These could incentivise merchant acceptance, which could be critical to driving adoption of digital wallets.
What Does This Mean For Your Business?
The pandemic gave a huge boost to digital payment technologies and using QR codes for in-store payment in Asia helped to kick-start the growth of digital wallets, whose users have realised how convenient they are. The Juniper report shows how the growth and popularity of superapps is also a huge driver in the growth of digital wallets, but another important factor in their growth is the fact that they are needed for many different types of digital payment systems, e.g. cryptocurrencies and central bank digital currencies (CBDC).
As we move further into an open banking era, this is also facilitating the growth of digital wallets. For many people and businesses in the UK however, using digital wallets is a new and an unknown territory, the trust in which may have been hampered by their association with the apparently volatile world of cryptocurrencies.
Some regions of the world, e.g. the Asia Pacific region, are probably more ready for widescale digital wallet adoption in the near future and at the moment for many UK businesses, how much things cost (i.e. rapidly rising prices) are more of an immediate concern than new payment systems.
By Mike Knight