Double-Digit Growth Forecasted For Digital Wallet & Mobile Money Transfers

 Customer uses Apple Pay system with Apple Watch to pay in a shop. (Source: Shutterstock)

Analytical services firm Juniper Research said in a new report that it expected consumer spending via digital wallets to rise by a whopping 40% this year, largely driven by in-store payments.

The firm said it expected consumers in Europe and North America to make nearly $790 billion in payments via digital wallets in 2019 and that mobile contactless payments for in-store transactions would more than double.

“The report highlighted the importance of digital wallet providers establishing partnerships with leading banks to maximize reach amongst consumers,” the company reported. “Juniper Research’s analysis found that Apple far outstripped its rivals, achieving the largest addressable share of banking consumers in seven of the 10 national markets assessed. In the online space, the study found that wallets, including Apple Pay, Amazon Pay and Visa Checkout, had also significantly expanded their availability at merchant sites, although all lagged well behind PayPal in this regard.”

Juniper Research was not as bullish about wallets embedded in wearables such as watches.

“Wearable-pay solutions are still completely dependent on the smartphone and are ultimately limited to a single use case. They are thus likely to remain, at best, a niche offering,” Juniper Research Analyst Nick Maynard said.

Juniper Research also said last week in a separate report that it expected the number of mobile money transfers to jump by almost 60% between 2019 and 2024, largely fueled by a surge in person-to-person, or P2P, payments.

The firm said the volume of domestic money transfers via mobile would rise from 130 billion this year to over 203 billion in 2024. Domestic P2P payments will account for about 80% of all domestic transfers in 2024, it added.

“Domestic transfers are being driven by increasingly easy mobile payment systems. In developed markets, digital wallets have made P2P payments far simpler, with services including PayPal, Venmo and Cash App enabling low-cost, fast and secure payments for a rapidly growing number of users,” it said. “In developing markets, mobile money provided by network operators is a key enabler of financial inclusion, enabling the unbanked to enter into the wider digital economy.”

Payments associated with social networks, such as Venmo and Facebook, also have a big influence in the expected growth of mobile money transfers, Juniper Research noted.

“Social payments are highly appealing to younger users, as they enable simple and effective digital payments to displace cash,” Maynard explained. “However, data security concerns about mixing payments and social networks will impact consumer attitudes among older users.”