Consumer spend using digital wallets across Europe and North America will increase by 40% this year to nearly $790 billion, according to a new study from Juniper Research.
It argues that the largest growth in 2019 would come from in-store payments, with mobile contactless payments more than doubling across these regions.
The study, Digital Wallets: Service Provider Analysis, Market Opportunities & Forecasts 2019-2024, found that while eRetail spend through wallets would remain the largest contributor to consumer spend, continued migration from cash would see a surge in wallet use at POS. It argued that this was particularly the case amongst younger demographics and in the US, where a third of iPhones are now used for contactless payments.
Banking, merchant partnerships essential
The report highlighted the importance of digital wallet providers establishing partnerships with leading banks to maximise reach amongst consumers. Juniper Research’s analysis found that Apple far outstripped its rivals; achieving the largest addressable share of banking consumers in 7 of the 10 national markets assessed.
In the online space, the study found that wallets, including Apple Pay, Amazon Pay and Visa Checkout, had also significantly expanded their availability at merchant sites, although all lagged well behind PayPal in this regard.
Meanwhile, social payments through wallets will grow strongly both this year and beyond; a trend expected to be accelerated in 2020 by the emergence of Facebook’s Calibra wallet and its attendant Libra cryptocurrency.
Wearable-Pay digital wallets a ‘niche offering at best’
However, the study was less optimistic about prospects for Wearable-Pay wallets; arguing that their limited addressable bases and functional constraints meant they would struggle against converged wallets – providing an extensive portfolio of online and offline payment offerings.
According to Juniper Research Analyst Nick Maynard: “Wearable-Pay solutions are still completely dependent on the smartphone and are ultimately limited to a single use case. They are thus likely to remain, at best, a niche offering.”
