Digital Wallets Set to Revolutionise Global Finance by 2025

As we approach 2025, digital wallets are at the forefront of digital transformation in financial services.

These software-based systems, which securely store payment information and passwords, are rapidly becoming the preferred method for transactions worldwide, reshaping how consumers and businesses interact with money.

Nicholas Holt, Head of Solutions and Delivery, Europe of Marqeta, emphasises the dominance of digital payments: “The future of payments is digital, and digital wallets will continue to dominate markets across the world as consumers demand more innovation and convenience in payments and banking.”

This shift towards digital wallets is part of a broader trend driven by advancements in technology, changing consumer preferences and the need for more efficient, secure payment methods. For businesses, the benefits of adopting digital wallet technology are manifold. 

These include reduced transaction costs and valuable insights into consumer behaviour. Companies that embrace this technology can gain a competitive edge by offering customers the convenience and security they increasingly demand.

Regional variations in digital wallet adoption

Today, significant disparities in digital wallet adoption rates exist across different regions, reflecting varying levels of technological infrastructure, regulatory environments and cultural attitudes toward digital finance.

Asia-Pacific is expected to continue its digital wallet boom in 2025, with countries like China and India already boasting high adoption rates. In China, for instance, digital wallets like Alipay and WeChat Pay are ubiquitous, handling billions of dollars in transactions daily.

Pietro Candela, EMEA General Manager for Alipay+, a cross-border mobile payment solution, provides insight into the Asian market: “A recent study has shown that the number of mobile wallets in use globally will increase by 2.7 to 4.8 billion by 2025, representing over half of the world's population, demonstrating the lightning growth of mobile payments around the world.”

Europe and North America are likely to see steady growth in digital wallet usage, driven by the increasing popularity of services like Apple Pay and Google Pay. However, adoption rates may lag behind Asia due to the entrenched use of traditional payment methods and regulatory hurdles.

Nicholas Holt of Marqeta reveals: “Currently, UK consumers are leading global adopters of digital payments, with data from Marqeta's annual State of Payments Report highlighting that the UK is outpacing the US when it comes to contactless payments and digital wallet use.”

Elsewhere, emerging markets in Africa and Latin America are poised for rapid growth in digital wallet adoption. These regions, often underserved by traditional banking infrastructure, are embracing mobile-first financial solutions to meet the challenge of underbanked populations. 

Pietro Candela of Alipay+ explains: “Wallets represented the spark of financial and mobile inclusion in emerging countries, where existing payment infrastructures had limited penetration and banking services were not accessible to young generations. 

“Wallets rapidly became the mobile gateway for digital services, changing the lifestyle of people both in crowded megacities as well as in rural areas.”

Ryan O'Holleran, Head of Sales, Enterprise at Airwallex, a global financial technology company, offers a global perspective: “By 2026 we can expect over 60% of the worldwide population to use digital wallets. The adoption is driven by technological advancements and needs across developed and emerging markets.”

Advanced features and innovations

As digital wallets evolve, a range of advanced features will start to become prevalent among those who adopt digital payments. 

These innovations are not just about improving existing functionalities; they're about reimagining what a digital wallet can do and how it can integrate more seamlessly into our daily lives.

Apple's introduction of Tap-to-Pay as part of iOS18 is just the tip of the iceberg. This feature allows iPhones to function as payment terminals, enabling small businesses to accept contactless payments without additional hardware.

Biometric authentication is likely to become standard, with facial recognition and fingerprint scanning providing enhanced security. Some digital wallets are already experimenting with voice-activated payments and augmented reality interfaces for a more immersive shopping experience.

Nicholas Holt of Marqeta says: “When the credit card was established about 70 years ago, it was a groundbreaking development. However, innovation stalled for many years, with static reward structures, such as 1.5% cash back. 

“However, now, we are seeing dynamic rewards being offered, where data is collected about card users to offer individuals bespoke and personalised rewards, and services suited specifically to them.”

Blockchain technology is also set to play a significant role in the future of digital wallets. Cryptocurrency integration is becoming more common, with some wallets allowing users to seamlessly switch between fiat and digital currencies.

The rise of ‘super wallets’ beyond China

While 'super wallets' like Alipay and WeChat Pay have dominated the Chinese market for years, their emergence in other regions has been slower. However, by 2025, we may see the rise of similar all-encompassing platforms in other parts of the world.

Pietro Candela of Alipay+ says: “Super-apps were pioneered in China but now they are used by the majority of the population across Asia and Africa.”

These super wallets offer a range of services beyond simple payments, including social networking, ride-hailing, food delivery, and even financial products like loans and investments. 

The perks for consumers are clear: a single app can handle most of their daily needs, from ordering groceries to splitting bills with friends.

Candela elaborates on the potential of super wallets: "Super Wallets enable users to manage, transact, and invest in diverse avenues through a secure virtual infrastructure, and are another example of payment services becoming personalised, digital and embedded into our daily lives."

However, the rise of super wallets faces several barriers outside of China. Regulatory concerns, particularly around data privacy and financial oversight, pose significant challenges. 

In the European Union, for instance, strict data protection laws may limit the ability of companies to create all-encompassing platforms.

Nicholas Holt of Marqeta explains: “The uptake of Super Wallets elsewhere will depend on each market's data privacy and ownership laws. 

“Essentially, how new applications look in each country may vary, but the undeniable trend of providers innovating quickly to provide customers with the breadth of services they desire is taking place on a global scale.”

Despite these challenges, the potential benefits of super wallets are driving innovation in this space. 

Candela reveals: “Ant International has developed the Alipay+ Mini Program container, to empower our digital wallet partners around the world to evolve their digital apps into Super Apps. 

“Alipay+ Mini Programs are small mobile applications developed by third parties that allow users to book services, purchase products, and access exclusive discounts and promotions.”

Digital wallets in e-commerce and beyond

The dominance of digital wallets in e-commerce is set to grow exponentially by 2025. 

According to a report by Juniper Research, digital wallets are expected to account for more than 50% of e-commerce transaction value globally by 2025, up from just over 40% in 2021.

Ryan O'Holleran of Airwallex emphasises the importance of digital wallets for businesses: “There is a clear appetite amongst consumers to transact using digital wallets. 

“Businesses that do not offer this payment method risk missing out on a growing market segment, hindering their competitiveness in the process.”

This growth is driven by the convenience and security offered by digital wallets, as well as the increasing integration of social media and e-commerce platforms. 

'Social commerce', where users can make purchases directly through social media apps, is likely to become more prevalent, further boosting digital wallet usage.

O'Holleran continues: “For e-commerce businesses in particular, it helps to reduce the issue of cart abandonment resulting in improved sales and revenue. 

“As the focus on security intensifies, we can expect a wider range of industries to tap into digital wallets and mirror the e-commerce sector's success.”

Beyond e-commerce, we can expect to see digital wallet use expand into new industries. The healthcare sector, for instance, could benefit from digital wallets that securely store medical records and facilitate payments for services. 

In the travel industry, digital wallets could streamline the booking process and store everything from boarding passes to hotel keys.

As we look towards 2025, it's clear that digital wallets will play an increasingly central role in our financial lives. 

From transforming e-commerce to revolutionising financial inclusion in developing markets, the impact of this technology will be far-reaching.

To read the full story in the magazine, click HERE.

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