The value of digital wallets transactions could rise as high as $16trn from today’s already impressive $9trni by 2028, according to the latest data from Juniper Research.
This growth rate 77% is driven by growth across both developed and developing markets, as the increased adoption of advanced services such as BNPL (Buy Now Pay Later) and microloans drives end-user engagement. The study found that in a highly congested wallets landscape, diversifying their appeal to users is vital.
A digital wallet is a software-based system that can act as a storage mechanism for a user’s payment, identity, loyalty, or ticketing information.
For further details, see the report, Digital Wallets: Platform Analysis, Key Trends & Market Forecasts 2023-2028, or download a free sample.
Advanced services to create new revenue streams
The report identified advanced services as a key source of revenue growth for digital wallets. Advanced services, such as BNPL or microloans, are allowing digital wallet providers to diversify their revenue. The popularity of BNPL, especially among younger consumers, will draw greater numbers of users, and generate additional revenue. This approach can be seen with Apple’s roll-out of add-on services, including Apple Pay Later.
Research author Michael Greenwood says: “Advanced services give digital wallet providers an opportunity to differentiate themselves in a congested market and generate additional revenue. Super app strategies, which many digital wallets are pursuing, will rely on the effective deployment of advanced services at scale.”
The research found that security benefits are a key driver of digital wallet use in eCommerce in developed markets. Many consumers do not wish to enter card information online. With digital wallets, this issue is reduced, as tokenisation enables card and other payment information to be used in a highly secure way. The research also identified that as digital wallets become broader, including elements of digital identity, convenience will play a greater role; enabling wallet services to act as an all-inclusive app for financial wellbeing.