Some regions like North America may experience stagnation while Asia is expected to experience strong uptake and ‘bifurcation’.
In an online survey of more than 5,000 mobile wallet users across Brazil, India, Indonesia, Japan and Russia in April and May 2021, incentivized participants were surveyed about mobile wallets usage. The survey concluded that one in two people will use a mobile wallet by 2025.
According to data offered by Boku, at the end of 2020, there were over 2.8 billion mobile wallets in use. Based on projections, this will increase by nearly 74% by the end of 2025 to 4.8bn mobile wallets, equivalent to about 60% of the world’s population.
Other findings from the survey include:
- South-east Asia (SEA) was the fastest growing mobile wallet region: Mobile wallet across Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam is expected to grow by 311% between 2020 and 2025, reaching up 439.7m wallets in use from 141.1 million in 2020. The rise in e-commerce and the dominance of super apps, particularly in markets like the Philippines and Indonesia, will likely accelerate mobile wallet adoption.
- China reaches maturity; Japan, Korea and Taiwan set for hyper-growth: The Far East and China are expected to continue to be the largest mobile wallet region in the world with 1.34bn users in 2020. Market saturation may result in slowing growth in China with a CAGR of just 2.2% per year. Meanwhile, markets including Japan, Korea and Taiwan are expected to continue to see accelerated adoption of mobile wallets with 98.4% market penetration by 2025.
- Africa and the Middle East expected to be No.2: This region is expected to be the second biggest mobile wallet market, set to grow by 147% between 2020 and 2025, driven by expanded usage of mobile money services that are increasingly offering additional services such as access to e-commerce.
- Latin American growth to be supercharged by e-commerce: This region is set to see increased mobile wallet use by 166% between 2020 and 2025. Long held back by consumers’ preference for cash-based payments and comparatively lower smartphone penetration, the region’s e-commerce growth is expected to supercharge mobile wallet use.
- Slow growth in Western Europe and North America: With 65% growth in Western Europe and 50% in North America projected by 2025, these regions may see the slowest mobile wallet growth. However, markets such as the UK are seeing a rise in card-based mobile wallets due to the adoption of contactless spurred on by the pandemic and shift towards cashlessness.
- Project growth and bifurcation of mobile wallet use: The projections indicate that the number of mobile wallets transacting over US$1bn per year is set to grow by 27% from 54 wallets in 2020 to 69 wallets by 2025. Not only will consumers mobile wallets more, they are expected to use more mobile wallets. Consumers in high-growth markets such as India and Indonesia use an average of 2.74 wallets.
Two types of mobile wallets are being used on a global basis: card-based mobile wallets such as Apple Pay and Google Pay; and stored-value mobile wallets such as AliPay and GrabPay. According to Boku’s Chief Product Officer Adam Lee: “The markets that are set to grow the fastest are those with the lowest levels of card penetration; stored value wallets are thriving.”
Added the firm’s CEO, Jon Prideaux: “For global merchants, mobile payment acceptance is not about accepting one type of mobile wallet or another, but ensuring that consumers in every market will have the required selection on payment types in order to monetize transactions.”
