Mobile proximity payments are the future as we move towards a cashless world. In some markets, cash is already a thing of the past but many nations are slower to make the mobile switch for a number of reasons.
We’ve collected the latest and most significant data on mobile payments and broken them down into sections covering global data, the US, Asia and the Pacific, Europe and the UK. This data was updated in January 2022.
Retail e-commerce sales worldwide were forecasted to climb 16.8% this year, to $4.921 trillion.
India, Brazil, Russia, and Argentina are among the countries with the most e-commerce growth, with each of them projected to post at least 26% growth in retail e-commerce sales this year.
This compound annual growth rate during the forecast period (2021-2026) will see a huge increase from the $1.434 Trillion in 2020.
Every country in a survey by eMarketer was reported to have experienced an increase in mobile contactless adoption between 2019 and 2021.
China is the leader when it comes to mobile payments, with 87.3% of the population reported to use contactless payment methods.
However, the US saw the greatest increase in adoption within the two year period, rising from 29% to 43.2% and overtaking India.
Paypal is one of the most popular online payment services, and the chart to the right shows the continual growth in registered users since 2010.
Over the last two years, this growth was accelerated, increasing by over 16% from the second quarter of 2020. While only showing the growth for one company, this trend mirrors the overall change in payment preferences which can be seen in the rest of this article.
According to Jupiter Research, the Far East & China has a market size of nearly $4 trillion for all it’s mobile wallet transactions, and this is estimated to rise by 59% to $5.7 trillion by 2025.
This makes the Far East & China by far the dominant region in terms of mobile wallet usage although the rate of growth is forecast to the slowest of the regions analysed.
Europe is predicted to increase mobile wallet transactions by 277% from $188 billion in 2020 to $708 billion in 2025.
The total number of mobile proximity payments users in the US exceeded 100 million in 2021. This number is expected to continue growing to a projected 125 million by 2025, account for over 50% of smarthphone users in the country.
Amazon dominates online sales in the US, generating more than one-quarter of e-commerce sales for every category other than auto/parts. It also controls the majority of sales for books/music/video (83.2% in 2021) and computer/consumer electronics (50.2%).
Despite the increaes in popularity of online shopping, and the subsequent rise in overall e-commerce transactions, the POS sale value is projected to exceed $10 trillion by 2024.
E-commerce transactions are also expected to rise, with online payments via smartphones almost doubling from $321 billion in 2020 to $634 billion in 2024.
Chart by MerchantSavvy.co.uk | Data Source: Worldpay's 2021 Global Payment Report
Countries in Asia Pacific are dominating the global uptake of e-wallets and mobile POS payments. Worldpay’s 2021 Global Payment Report forecasts that digital and mobile wallets will account for nearly half of all POS payments in the APAC region, at 47.9%.
Usage of debit and credit cards will increase marginally, but likely as a result of a fall in popularity for cash payments which are predicted to drop from 19.2% in 2020 to only 10.8% in 2024.
Chart by MerchantSavvy.co.uk | Data Source: Worldpay's 2021 Global Payment Report
According to Global Mobile Payment Methods 2021 Post COVID-19, 87% of mobile internet users in China paid via mobile in 2021, while South Korea and the US were second and third highest.
In the same report, Hong Kong, China and Singapore were shown to be the top three market leaders worldwide in mobile wallet adoption in 2020. With mobile adoptions rates of 85%, 84% and 71%, respectively, these three countries changed much more due to the Covid-19 pandemic than countries like the UK and US.
A study by McKinsey found that average digital adoption rates across Europe rose from 81% to 94% during the pandemic, accounting for up to three years of growth. They also found that more than 70% of European consumers plan to use digital services as much or more after the pandemic subsides.
The 2021 Worldpay Report predicts that the popularity of BNPL will make the largest gains of any payment method in Europe. By 2024, it is projected to nearly double its share to account for 13.6% of e-commerce spending, becoming the fourth most popular payment method behind mobile wallets, credit cards, and debit cards.
The number of UK mobile proximity payment users is expected to grow from 19.9% of the population (11.2 million users) in 2021 to 24.1% (13.9 million users) by 2025.
While 2020 saw a large increase of 25%, partly due to the Covid-19 pandemic, the growth in coming years is projected to not be so drastic.
UK Finance’s Annual Report showed that credit card usage has been declining due to the rise in mobile payments, but this trend was accelerated by the Covid-19 pandemic as it changed many people’s spending habits.
Unsurprisingly, it’s Generation Z and Millennials who are driving the shift towards mobile payments in the UK, continuing the trend from previous years. UK Finance’s report also breaks down mobile payment adoption in the country by age group to give a generational overview of the mobile transition.
As you can see, nearly half of the Generation Z respondents used digital or mobile wallets in 2020. At this stage, it’s safe to assume mobile payments will continue to increase which is why most merchant account providers and payment service providers accept them.
Since 2015, contactless credit and debit card payments have become increasingly popular. Despite sharp drops in total contactless transactions during the lockdowns of the last two years, the overall trend is continuing.
With the rise in contactless payments, more merchants have started going cashless.
It is likely that over a billion contactless transactions will take place every month in 2022 in the UK.
Along with the increase in contactless payments, the UK has also been experiencing an increase in internet shopping. The change was gradual year-on-year until 2020, where subsequent lockdowns led to large spikes in online purchases being made.
The Office for National Statistics reported a record peak of £3.3 Billion worth of online sales were made in November 2020, compared to £1.8 billion a year before in November 2019.
In Q1 2021 35.5% of retail sales in the UK were done online compared to 20.6% in Q1 2020.
1. Digital and mobile wallets are expected to account for over half (51.7%) of global e-commerce payment methods by 2024. (Worldpay Report 2021)
2. Mobile wallets are already by far the preferred payment method in the Asia-Pacific region, where they are projected to make up 47.9% of POS transactions in 2024. (Worldpay Report 2021)
3. While mobile payments saw a large increase in popularity through 2020 and 2021, the Covid-19 pandemic also accelerated the decline of cash by a predicted 3 years. Cash was used for 20.5% of global POS volume in 2020, a 32.1% reduction from 2019, whilst mobile payments increased by rising 19.5%. (Worldpay Report 2021)
4. Despite the increase in mobile payment popularity, checks still accounted for 29% of B2B transactions in 2019, with two-thirds of those checks issued by small and midsize businesses (SMBs). (Glenbrook, July 2020)
5. With the rise in mobile payments and a change in how consumers choose to spend their money, cash transactions are set to witness a major fall from 20.5% in 2020 to 12.7% in 2024. (Worldpay Report 2021)
6. Buy now, pay later (BNPL) continues to earn market share globally, expecting to double from 2.1% in 2020 to 4.2% by 2024. (Worldpay Report 2021)
7. Across iOS and Android, there were nearly one million monthly UK users of the Klarna app in September 2021. This amount almost doubled in just over a year, with 506,377 reported users in August 2020. (Airnow Data)
8. The total transaction value of the digital payments market is projected to be worth USD 11.29 trillion by 2026, up from USD 5.44 trillion in 2020 and registering a CAGR of 11.21% during the period of 2021-2026. (Mordor Intelligence)
9. Salesforce estimates that global online sales spiked 71% year on year in Q2 2020 (CNBC, August 2020)
10. 74% of global consumers said they would keep using contactless payment methods beyond the pandemic. (Mastercard, April 2020)
Throughout this article mobile payments is defined as using a mobile device to make a in-store or point of sale payments using mobile wallets and technology like near-field communication (NFC) payments like Apple pay uses, Magnetic secure transmission (MST) payments like Samsung Pay or Sound waves-based / signal based payments. We are not referring to using mobile phones to transfer money remotely or purchase something online through a payment processor (e.g. via PayPal or entering credit card details). If you are looking for more information on mCommerce, check our global mobile eCommerce stats and forecasts article.
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