The Asia-Pacific region is driving a broader global shift to mobile wallet payments in the midst of the COVID-19 pandemic.
According to the annual Global Payments Report by Worldpay from FIS, which examines current and future payment trends across 41 countries, use of mobile wallets exceeded cash for the first time for in-store payments globally. Cash usage dropped 10 percentage points in 2020 to account for just one-fifth of all face-to-face payments worldwide.
Looking at trends in specific countries, the study finds use of cash for in-store payments fell by half or more in Canada, the U.K., France, Norway, Sweden, and Australia. Cash payments in the U.S. made up $1 trillion of in-store payments in 2020, down roughly 29% from $1.4 trillion in 2019.
The study also reveals that the Asia-Pacific region continues to lead in the use of mobile wallets at the POS, with about 40% of in-store payments in that region now executed through contactless payments. However, the use of mobile wallets accelerated across all regions in 2020 and now accounts for about 10% of payment methods in North America, 8% in Middle-East-Africa, 7% in Europe, and 6% in Latin America.
The report projects that by 2024, cash will account for less than 10% of in-store payments in the U.S. and only 13% of payments worldwide. Over that same time period, the report projects digital wallet payments to account for 33% of all in-store payments across the globe, including 16% in the U.S.
The study also examined global e-commerce trends. Findings include:
• Total e-commerce spending grew globally 19% during 2020 to $4.6 trillion in value. That growth was the highest in the past five years and represented two-to-three years of typical acceleration in a single year. Analysis shows global e-commerce spending could grow to $7.3 trillion by 2024.
• Globally, usage of digital wallet-based online transactions in 2020 grew 7%. By 2024, the study projects that digital wallets will account for more than half of all e-commerce payments worldwide.
• Usage of traditional payment methods such as cards and cash-on-delivery are quickly losing share and expected to account for less than 40% of e-commerce transaction payment methods by 2024. The adoption of buy-now-pay-later digital transaction methods is expected to double by 2024, driven by rapid growth in the U.S. and Europe.
“Our new research shows that the world is entering a new phase of adoption of digital payment methods,” said Jim Johnson, head of merchant solutions at FIS. “The global pandemic has brought a cashless future closer on the horizon.”