Mobile payment sector poised to hit $3.5 trillion mark by 2023, predicted in new study
Mobile Wallets on the Rise: The Expanding U.S. Market
The mobile wallet industry is experiencing significant growth, with companies like ApplePay, Google Wallet, WeChat Pay, and AliPay leading the way. This growth is driven by several key factors, including the increasing adoption of digital payments, high smartphone penetration, and the rise of contactless transactions.
In the U.S., the mobile wallet market is projected to grow at a CAGR of 13.12% from 2025 to 2032, reaching about USD 6.76 billion by 2032. This growth is partly due to the accelerated adoption of mobile wallets during the COVID-19 pandemic, as contactless payments became preferred to reduce physical interaction. This initial surge led to behavioral changes that continue to define the industry's growth post-pandemic.
Retailers have embraced mobile wallets as a safer and more convenient alternative to cash and cards. Many digital wallets now integrate additional features like loyalty programs to enhance customer retention. For instance, 7-Eleven debuted a mobile wallet that lets consumers make contactless payments at select locations.
Security is another crucial factor driving the growth of the mobile wallet industry. Advancements in security features such as biometric authentication (face ID and fingerprint scans) are enhancing user trust in mobile wallets.
The average transaction value for mobile point-of-sale transactions is $1,670 in 2021, and it is expected to grow by 22% to $2,051 over the next two years. The mobile payments market is estimated to grow to $2.4 trillion in 2021, a 24% increase from last year.
Despite the growth in the U.S., cash, credit cards, and debit cards remain the dominant forms of payment in Western countries. However, the trend is shifting, with 60% of customers surveyed in 2018 wanting to buy goods in-store using their smartphone and accrued loyalty points. Retailers are increasingly accepting contactless payments and expect greater adoption of the technology in the future.
In conclusion, the mobile wallet industry is poised for robust growth in the U.S. and beyond, driven by factors such as digital payment adoption, smartphone penetration, contactless transactions, P2P payments, loyalty integrations, demand for speed and security, and the ongoing impact of the COVID-19 pandemic. The industry's growth is further boosted by advancements in security features and the increasing acceptance of contactless payments by retailers.
- The pandemic has significantly accelerated the adoption of mobile wallets, making contactless transactions preferred to reduce physical interaction.
- Retailers are increasingly embracing digital wallets as a safer and more convenient alternative to cash and cards, with some integrating loyalty programs to enhance customer retention.
- Security features like biometric authentication are enhancing user trust in mobile wallets, contributing to the industry's growth.
- The mobile payments market is estimated to grow to $2.4 trillion in 2021, with the average transaction value for mobile point-of-sale transactions expected to grow by 22%.
- While cash, credit cards, and debit cards remain dominant forms of payment in Western countries, the trend is shifting, with 60% of customers surveyed wanting to buy goods using their smartphones and accrued loyalty points.
- The industry's growth is further boosted by advancements in technology, such as AI and fintech, which are enabling peer-to-peer payments and other innovative financial services in the banking-and-insurance and finance industries.
