A groundbreaking study from Juniper Research, a leading authority on emerging payments, anticipates a sharp increase in digital wallet transactions, forecasting that the total transaction value will skyrocket from $9tn in 2023 to $16tn in 2028. This demonstrates a substantial growth of 77%.
This trend is fuelled by expansion across both developed and emerging markets. The rising acceptance of advanced services such as Buy Now Pay Later (BNPL) and microloans is significantly stimulating user engagement. In an increasingly crowded digital wallet marketplace, the study underlines the importance of providers diversifying their appeal to users.
Digital wallets function as software-based systems that store user information including payment details, identity, loyalty, and ticketing information.
The study spotlights advanced services as a pivotal source of revenue growth for digital wallets. Services such as BNPL and microloans are enabling digital wallet providers to diversify their income streams. The increasing popularity of BNPL, particularly among younger consumers, is expected to attract more users and thereby generate additional revenue. This strategy is exemplified by Apple’s introduction of supplementary services, including Apple Pay Later.
Juniper Research author Michael Greenwood said, “Advanced services offer digital wallet providers a chance to distinguish themselves in a saturated market and generate extra revenue. Super app strategies, which many digital wallet providers are pursuing, will depend on the successful large-scale deployment of advanced services.”
The study also determined that security advantages are a primary incentive for using digital wallets in eCommerce in developed markets. Many consumers prefer not to input their card information online. The issue is mitigated with digital wallets, where tokenisation enables card and other payment information to be securely used.
As digital wallets evolve to incorporate aspects of digital identity, convenience is becoming increasingly important, allowing wallet services to function as a comprehensive app for financial wellbeing.
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