- Digital wallets: Usage will increase from 4.3 billion users in 2024 to 5.8 billion in 2029
- Key technologies and service diversification: Tools like QR codes and NFC. The role of super apps such as WeChat and Gojek
In an increasingly connected world, digital wallets are now reaching nearly the entire global population, changing the way finances are managed.
According to the report “Why 5.6 Billion People Will Adopt Digital Wallets” by Juniper Research, the number of digital wallet users will increase from 4.3 billion in 2024 to 5.8 billion in 2029, with a compound annual growth rate (CAGR) of 6.4%. This exponential growth reflects the shift towards cashless economies and highlights the importance of these tools for financial inclusion.
Key technologies
Digital wallets are applications that allow users to make payments both online and in physical stores using stored credentials such as debit cards or funds loaded directly into the wallet. They use technologies like NFC (Near Field Communication) or QR codes to facilitate quick and secure transactions. Additionally, their use is not limited to payments; they also include features like digital identities, electronic tickets, and secure data transfers.
The COVID-19 pandemic marked a turning point in the adoption of digital wallets. By reducing physical contact, these tools became a safer and more practical alternative to cash and physical cards. However, the true potential of these wallets goes beyond convenience: they are transforming access to financial services globally.
Main drivers of global Digital Wallet adoption
- Financial inclusion in emerging markets
In regions where access to traditional banking is limited, digital wallets are bridging the financial gap. According to the report, market leaders such as Huawei and Ericsson have developed innovative credit products for emerging markets. For example, Huawei has partnered with telecommunications operators in Ethiopia to offer microloans, a solution that empowers financially underserved communities.
These initiatives not only increase the adoption of digital wallets but also improve the quality of life by offering essential financial services such as loans and digital payments, which were previously inaccessible to large segments of the population.
- The role of open banking
Open Banking is a key catalyst for the growth of digital wallets. This model allows financial institutions and third parties to securely share data, enhancing the user experience. According to Juniper Research, one of the most promising features of Open Banking is payment initiation.
Thanks to Open Banking, users can make payments directly from their bank accounts through digital wallets without the need to store financial information within the app. This not only reduces security risks but also simplifies the payment experience for consumers.
Moreover, Open Banking facilitates the development of services such as account aggregation, financial monitoring, and wealth management, which adds value for users and encourages adoption.
Super apps: the next step in evolution
Super apps represent an evolution of digital wallets by offering an all-in-one experience. These apps combine functionalities such as payments, e-commerce, banking, and transportation into a single platform. Iconic examples like WeChat in China and Gojek in Southeast Asia have demonstrated how super apps can generate diversified revenue streams and provide greater convenience to users.
In developed markets, companies like Amazon are adapting elements of the super app model by combining services such as shopping, multimedia content, and food delivery, although they have not yet consolidated all these functions into a single app.
The super app model not only expands the reach of digital wallets but also strengthens their relevance in advanced digital economies.
Technology behind Digital Wallets
- QR codes: simplicity and security
QR codes play a crucial role in the use of digital wallets. They allow for payments by scanning a unique code, eliminating the need to share financial details. According to the report, QR codes are also used for P2P (peer-to-peer) transfers and to access digital identities, increasing their versatility and appeal.
This simple technology has been key in the adoption of digital wallets, especially in emerging markets where NFC infrastructure is limited.
- Loyalty programs and personalization
Loyalty programs are also driving adoption. Digital wallets allow personalized rewards based on transaction data, enhancing customer loyalty. Juniper Research highlights that cashback and rewards schemes are especially important in developed markets, where competition among wallets is more intense.
Benefits for users and businesses
Digital wallets not only benefit consumers by offering convenience and security but also serve as a powerful tool for businesses. By accepting digital payments, businesses can:
- Reduce costs associated with handling cash.
- Increase the speed of transactions.
- Access new markets and customer segments.
Additionally, digital wallets are designed to integrate easily with e-commerce systems, facilitating the growth of online businesses.