The migrations toward cashless societies exacerbate the need for mobile wallets with enhanced functionalities and access to various end markets, including identity and ticketing. According to global technology intelligence firm ABI Research, the worldwide mobile wallet market will increase from a circulation of 3.5 billion in 2022 to over 5.6 billion in 2027.
“Ecosystem players in the mobile wallet market should prepare for the steady migration of many economies away from cash. Compelling mobile wallet solutions will cover the need for enhanced functionalities and user experience,” says Sam Gazeley, Digital Payment Technologies Analyst at ABI Research. “Underbanked regions such as the Middle East, Africa, and Latin America will experience the strongest growth in mobile wallets. These regions present an opportunity to access banking services through a wallet or mobile money services, further driven by having mobile infrastructure readily available rather than banking infrastructure.”
The global mobile wallet market is demonstrating strong growth through the post-pandemic era. Sporting the largest proportion of underbanked and unbanked populations, the Middle East and Africa are undergoing a ground-up transformation of their digital payment ecosystem. This growth in recent years is owed to the development and increased usage of money services like M-Pesa and MTN MoMo for e-commerce. Consumers in Africa are continuing to experience the benefit from the widespread proliferation of alternative payment solutions developed by international neo-banks, challenger banks, and telcos. The region overall will demonstrate robust growth over the forecast period, slightly behind that of Latin America, with a 17.7% CAGR between 2022 and 2027.
Latin America is also experiencing a boom in mobile wallet use. As the second fastest-growing market for e-commerce after the Asia-Pacific, many consumers are shopping and banking for the first time in a digital ecosystem. Latin America is effectively echoing the market seen in the Asia-Pacific over the last few years, in which access to better connectivity and digital services caused a surge in the mobile wallet market. ABI Research sees Latin America as the fastest-growing region over the forecast period, demonstrating a CAGR of 18% between 2022 and 2027
As it relates to the market ecosystem, the incumbent OEM wallets, such as Apple Pay, Samsung Pay, and Google Pay, are seeing increased pressure from Revolut, Monzo, and Curve on the neo/challenger bank side and payment companies such as PayPal and Venmo. Each seeks to outperform traditional brick-and-mortar banking solutions through digital-first approaches. “Furthermore, smart card vendors that have primarily focused on the physical payment card market, such as Thales, G+D also have a key role to play in the adoption of mobile wallets, either by offering their own wallet solution, providing cloud-based or decentralized solutions for the digitization of cards, or assisting central banks in launching digital currencies,” Gazeley concludes.
These findings are from ABI Research‘s Mobile Payments Market: Innovation Strategies for Future Success application analysis report. This report is part of the company’s Digital Payment Technologies research service, which includes research, data, and ABI Insights.