Mobile wallets set to be worth £2.5tn globally by 2023
As part of the general trend towards the use of cashless financial transactions, the mobile wallet has become increasingly common due to its safety and ease of use. Over the course of the Covid pandemic and the attendant rise in online and contactless shopping, more people have used mobile wallets and more money has passed through them than ever before. This is a trend which is likely to stick as many people become aware of the convenience this technology provides.
Market research conduct by Finaria shows that the mobile wallet industry is growing by almost a quarter each year. But why is this? There are numerous immediate benefits. Users of mobile wallets do not have to carry money or physical debit or credit cards on their person, reducing the risk of theft. Also, a thief would need the password to get into the cards stored in the mobile wallet. This increased security is a key reason for the popularity of mobile wallets.
Another reason is the exceptional ease of use. The user’s mobile device, such as a phone or watch, is simply scanned at the till, or other ‘point of sale’ such as a bar or the check-in desk at a hotel. The business applications of mobile wallet technology are almost limitless.
In 2021, the average user spent £1,200 on point-of-sale transactions using mobile wallets, showing the scale of the market that is out there. And the uptake is big. In 2019, millions were already using this technology, but by 2023, the total number of people using mobile wallets looks set to reach billions.
The highest rate of use of the technology is in Asia, especially in China. This is because credit cards were used much less often here before anyway, and because the technology to make cashless payments using smart phones was already in place. The US comes in a close second with the UK in third. It’s clear that the ongoing trajectory is for credit and debit cards to see a downturn in use and be replaced by mobile wallets.
As well as a potentially lucrative market, there is also a potential challenge. Businesses will need to keep up with customer’s expectations as more and more people start to take it for granted that they can pay for items using a mobile wallet and simply avoid businesses who do not allow this. This is not restricted to areas like retail: pubs, bars, and restaurants should pay attention too.
While the average mobile wallet user is still relatively affluent, businesses who sell high-end art pieces, furniture and so on should look to adopt mobile wallet payments in anticipation of these payment trends. And of course, as the user base tends to be younger, anyone in the takeaway food business or other youth-facing industry should adapt quickly. Mobile wallets are moving from the world of new-fangled shiny technology into the commonplace.