4.7 billion phones with active mobile wallets will be in consumers’ hands by 2026 according to the latest calculations from Juniper Research. That represents an impressive 57% increase in just four years, and the ubiquity of mobile wallet-enabled handsets will translate to a huge lift in the value of mobile wallet transactions worldwide.
Mobile wallet transactions totaled $6.9 trillion in 2022, and that figure will grow to an astounding $11.2 trillion in 2026, accounting for 93% of all digital wallet transactions.
This should be welcome news to many companies seeking to expand their reach to hundreds of millions of today’s global mobile-first consumers who either do not have credit cards, are unwilling to use them, or who want the convenience of using their preferred local payment method.
99% Increase in Just Four Years
A deeper look behind these eye-popping numbers reveals what should have big implications for companies that sell digital goods and services like software, music, and video on demand.
The value of mobile wallet transactions for digital goods will increase even more – doubling from $192.8 billion in 2022 to $383.9 billion in 2026. Mobile wallet transaction volume for digital goods purchases globally will shoot jump up 85% to 42 billion.
Projected growth in the total value of mobile wallet payments for online digital goods outpaces other wallet payment categories measured by Juniper Research, including online physical goods, in-store purchases (except for proximity NFC wallet purchases), domestic money transfer, and utility bill payment. While some of these transaction categories such as in-store and online purchases of physical goods are much higher in terms of total dollar value, a primary takeaway from Juniper Research’s latest study is how quickly consumers worldwide are turning to mobile wallets to purchase digital goods and services.
Demand for Digital Services Blossoms in Regions Where Mobile Wallets Are Popular
From banking to work to socializing to entertainment, consumers around the world are conducting more aspects of their lives digitally. The ubiquity of mobile devices means they play an increasingly dominant role in how today’s consumers use digital services like music and games or ride sharing – and in how they shop and pay.
Consumers’ appetite for digital content continues to grow. According to Statista, worldwide revenue from video games will grow 38% from $197 billion in 2022 to $271.8 billion in 2026. Revenue from video-on-demand will increase 56% from $94.9 billion to $147.9 during the same time.
Revenue growth will be even higher in some regions where mobile wallets are growing in popularity, like Africa (60% revenue growth in the next four years for video, and 37% for gaming) and Asia (58% growth for video and 40% for gaming).
Mobile Wallet Payments Growth Strategy
For global digital entertainment and gaming merchants, making it easy for consumers to pay for services using local mobile wallets and other alternative payment methods should be part of their strategy to acquire and retain new customers in new geographies.
Netflix’s success in acquiring new customers in Asia in 2022 provides a good roadmap for a payments strategy that includes local payment methods like mobile wallets and carrier billing to drive subscriber growth. Bloomberg reported that after seeing new members signing up using alternative payment methods more than triple, the company adopted this strategy in other markets.
For merchants, a successful local payment method strategy must take into account optimizing customer experience, performance, and operational efficiencies. Payments is a critical touchpoint with new and existing customers that determine conversion and lifetime value as they expect smooth, convenient, and secure experiences. This may include seamless integration with loyalty programs or ways to minimize false declines, such as auto top-up reminders for mobile wallets.
There are many factors contributing to the performance of specific local mobile wallet connections, and for global merchants selling digital subscriptions, supporting frictionless, repeatable merchant-initiated charges made without a card is chief among them. Tokenization allows charging a mobile wallet or other local payment method without customer action, a critical feature for any digital subscription or marketplace.
Local payment methods and mobile wallets in particular are evolving quickly. Merchants should work closely with a payments service provider with deep knowledge of local markets and how to tailor programs with the high-performing mobile wallet brands that will help ensure the best outcomes.