World heads towards cashless society as use of mobile wallets shoots up

The Asia-Pacific region is at the forefront of a global shift towards mobile wallet payments, escalated by the global Covid-19 pandemic. Prior to the events of 2020, a move away from cash was growing steadily but the spread of coronavirus caused this phenomenon to increase at a rapid rate. 

This information was revealed by the annual Global Payments Report by Worldpay from FIS, which looks at current and future payment trends across 41 countries. It showed that the use of mobile wallets exceeded cash when used for in-store payments for the first time when looking at the world as a whole. The use of physical cash actually dropped 10% in 2020, meaning it accounts for just 20% of all in-person payments globally. 

It also discovered that total e-commerce spending grew by 19% during 2020 to reach £3.34 trillion. This is the highest increase in the past five years, and further analysis suggests global e-commerce spending could reach £5.3 trillion by 2024. 

Additionally, the use of digital wallets with online transactions grew 7% throughout 2020. The study projects that digital wallets will be responsible for over 50% of all e-commerce payments globally by 2024. 

Looking more closely at specific countries, we learn that the use of cash for in-store purchases fell by at least 50% in Canada, the UK, France, Australia, Sweden and Norway. Cash accounted for £730 billion worth of in-store payments in 2020, down nearly a third from 2019. 

But countries in the Asia-Pacific region lead the way in terms of using mobile wallets at the cash register. Around 40% of in-store payments here are contactless. The use of mobile wallets increased across all regions in 2020, accounting for 10% of payments in North America, 8% in Middle-East-Africa and 6% in Latin America. 

The report estimates that cash will be used in less than 10% of in-store payments in the United States by 2024, and just 13% across the world. The report also projects that digital wallet payments will account for a third of all in-store payments globally. 

It looks clear that the world has entered a new stage of digital payment usage. Escalated by the global pandemic, a cashless future looks inevitable, with mobile wallets taking us ever closer to the point where physical cash becomes a relic of the past.