More Than Half of the World’s Population Will Use Mobile Wallets by 2025, Study Finds

• Southeast Asia is the fastest growing region in the world for mobile wallets, with a CAGR of 25.5% and overall growth of 311% over the next five years
• Latin America and Africa / Middle East are second and third fastest growing regions, expected to expand 166% and 147% respectively by 2025
• Between 2020 and 2025, the number of mobile wallets totaling over $ 1 billion in transactions per year will increase by 27%, creating a growing acceptance challenge for merchants.

Today, the largest mobile wallet growth report ever released predicts that one in two people will use a mobile wallet by 2025. By the end of 2020, more than 2.8 billion mobile wallets were in use. That number is expected to increase by almost 74% to reach 4.8 billion used mobile wallets by the end of 2025, or nearly 60% of the world’s population. The fastest growing markets are Southeast Asia, Latin America and Africa / Middle East, where mobile wallets are replacing cash and cards for more convenient digital payments.

Boku , a fintech company behind the world’s leading global mobile payments network, released its2021 Mobile Wallets Report in partnership with digital technology analyst firm Juniper Research , which provides insight into the adoption and use of mobile wallets in major markets around the world. In 2019, mobile wallets overtook credit cards to become the most widely used type of payment globally, and the move online, spurred by the pandemic, has accelerated adoption. The use of mobile wallets is growing rapidly across the world, with emerging markets leading the way.

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Main conclusions

• Southeast Asia is the fastest growing region in mobile wallets – mobile wallet use will increase 311% between 2020 and 2025, reaching 439.7 million used wallets in Indonesia, Malaysia , in the Philippines, Singapore, Thailand and Vietnam against 141.1 million in 2020. The rise of e-commerce and the dominance of super-apps such as Grab and Gojek, especially in markets like the Philippines and the Indonesia are driving the accelerated adoption of mobile wallets.
• China Matures as Japan, Korea and Taiwan Prepare for Hyper-Growth – Far East and China Remain World’s Largest Region for Mobile Wallets with 1.34 Billion Users in 2020. Market saturation slows growth in China, with a CAGR of only 2.2% per year. At the same time, markets such as Japan, Korea and Taiwan will continue to see accelerated adoption of mobile wallets with market penetration of 98.4% by 2025.
• Africa and the Middle East is the second largest mobile wallet market –  This is expected to grow 147% between 2020 and 2025. This is driven by increased use of mobile money services such as M- Pesa, which increasingly offer additional services such as access to e-commerce.
• Growth in Latin America is boosted by e-commerce –  This region is expected to increase its use of mobile wallets by 166% between 2020 and 2025. Long held back by consumer preference for cash payments and a comparatively lower penetration of smartphones, this is changing rapidly, and the growth of e-commerce in the region is amplifying the use of mobile wallets.
• Slow growth in Western Europe and North America – With 65% growth in Western Europe and 50% in North America by 2025, these regions will experience the lowest growth in mobile wallets in the past five coming years. However, markets such as the UK are seeing a boom in card-based mobile wallets due to the pandemic-driven adoption of contactless payment and the shift to cashless payments.

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“Although mobile wallets are used globally, we are finding that two distinct types are in use today. The first is card-based mobile wallets, like Apple Pay and Google Pay, which provide an easier way to pay with the cards people already have. The other is stored-value mobile wallets, like AliPay and GrabPay, which allow consumers to transact with digital money and which are popular in emerging markets whose e-commerce sectors are seeing rapid growth. Said Adam Lee, Product Manager at Boku. “The markets that are expected to grow the fastest are those with the lowest card penetration levels,” with stored value portfolios flourishing. In North America and Western Europe, dominated by card-based mobile wallets, we are seeing the slowest growth in mobile wallet adoption as the technology offers only an incremental advantage. ”

“We are seeing a clear bifurcation in the market between mobile card wallets in developed markets and mobile stored value wallets which are ubiquitous in Asia and growing rapidly in all emerging markets,” concluded Mr. Lee.

The growth and bifurcation in the use of mobile wallets presents both an opportunity and a challenge for traders. The number of mobile wallets totaling more than $ 1 billion in transactions per year is expected to increase by 27%, from 54 wallets in 2020 to 69 wallets by 2025. This offers a lucrative opportunity for merchants looking to acquire valuable customers. , many of which only use mobile wallets. However, not only are consumers using their mobile wallets more, they are each using more mobile wallets. Consumers in high growth markets such as India and Indonesia use an average of 2.74 wallets.

“We are witnessing a paradigm shift in payments driven by mobile wallets. Mobile wallets have lowered the barrier to making digital payments and, at the same time, brought billions of new consumers to e-commerce. These consumers are not in North America or Western Europe, they are in emerging markets, and although they don’t have a credit card, they have a huge number of mobile wallets, ”said Jon. Prideaux, CEO of Boku. “For global merchants, accepting mobile payments isn’t about accepting one type of mobile wallet or another, it’s about accepting ensure that consumers in all markets have the requisite choice of payment types in order to monetize transactions. ”

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