Digital wallets have been here for decades but its adoption and use has grown by about 70% during the Coronavirus plague era and expected to double this figure by 2025.
The number of unique e-wallet users in 2020 during the peak of Coronavirus plague where the use of cash was limited and discouraged, was around 2.6 billion. In 2019, about 2.1 bln users globally were using mobile wallets to carry out domestic or cross-border payments, or send money.
In the US, the average transaction value of a digital wallet transaction is about 25% more than a traditional card transaction. As per the report by Worldpay Global Payments, over a half of overall electronic commerce transactions worldwide are projected to be conducted using an e-wallet by next year.
Now, a new study by Juniper Research indicates that unique digital wallet users globally will surpass 4.4 billion in 2025. The growing connection between in person and secure remote commerce (SRC) platforms is leading to substantial utilization of mobile wallets more than ever, with online wallet exploitation cramped to pricey purchases or bulk bill payments.
The number keeps on increasing and the trend is expected to skyrocket further. This is due to the new technologies being introduced in developing these wallets. For instance, developers are using blockchain technology to increase the cybersecurity of digital wallets. Any user would want to see his or her money stored in a secure wallet.
The digital wallets driven by Blockchain and distributed ledger technology (DLT) are effectively replacing cash, credit cards, vouchers, checks, and gift cards since they have been proven to offer fast, secure, instant, transparent transactions across all parts of the globe. Blockchain-based e-wallets have helped to get rid of the total possibility of scam, manipulation, altering or hacking data.
E-wallet solutions that have modern integrated security solution features such as tokenization, DLT, biometric verification or artificial intelligence (AI) have significantly helped to eliminate the risk of fraud and chargebacks. E-wallets which use card tokens together with advanced user authentication have a higher rate of transaction approval globally compared to card-on-file transactions.
Digital wallets provide a plain sailing e-commerce experience with fewer clicks to check out. For instance, when a company dealing in a certain business rolls out the Apple Pay, Google Pay or Amazon Pay, PayPal, Samsung Pay, Paytm, Microsoft Wallet, American Express digital wallet in its online app or web, clients can easily check out or purchase a product online with the help of the payment info securely stored in their e-wallet account.
However, e-wallets are still facing some challenges such as security concerns especially cyberattacks on non DLT wallets; resistance to change – it’s hard for some customers that have been using cash for so long to shift to electronic wallet payments; perceived difficulty in budgeting – users with poor budgeting skills tend to spend a lot (extravagantly) with e-wallets; and digital wallet might not be recognized or compatible in every market or everywhere – not all merchants or online businesses allow all e-wallet transactions.
Digitization in times of the pandemic and lockdown increases rapidly and the trend continues to gain more momentum every day that passes by. As CoinIdol, a world blockchain news outlet reported, technologies such as artificial intelligence, blockchain, machine learning and internet of things (IoT) have played a big role in the fight against the Covid-19 pandemic, and that’s why their adoption is increasing worldwide.