The 2024 edition of The Global Payments Report from Worldpay shows digital wallets continuing their lead as the world’s fastest-growing payment method.
Last year, wallets accounted for 50% of global e-commerce spend (over $3.1 trillion) and 30% of global point of sale (POS) spend, or more than $10.8 trillion.
By 2027, Worldpay project that wallets will constitute 49% of all global transaction value, or more than $25 trillion.
Focusing in on the digital/physical divide, this year’s study sees e-commerce surpassing $6.1 trillion in sales value – and online transactions rising twice as fast as physical POS.
E-commerce is projected to grow at 9% per annum through 2027 compared to 4% for POS transactions. In 2023, e-commerce made up 14.4% of all commerce; by 2027, it’s forecast to exceed 17%.
Cards still strong, cash relevant
Given that most digital wallets are linked to cards, the upsurge in wallet use does not spell the end for payments using plastic: instead, cards are now being employed inside digital wallets.
Around the world, card transaction values are higher than ever before and show every sign of continued growth.
Meanwhile, cash remains a vital tool for billions of consumers, accounting for 16% of global transaction value or $6 trillion.
Cash maintains a double-digit share of overall spending in three-quarters of the 40 markets surveyed in The Global Payments Report 2024.
A2A challenged: BNPL steady
While Account-to-Account (A2A) payments are becoming dominant in emerging markets from India to Brazil, they have found less success in card-heavy markets such as the UK and USA.
Merchants love the lower cost of A2A payments, as well as settlement times that are often faster than card-based transactions.
It remains to be seen whether consumers in Europe and North America can be persuaded to drop their long-ingrained card habit that’s now lasted for decades.
When it comes to emerging payment methods, Buy Now Pay Later (BNPL) has attracted huge interest in recent years.
Initial rapid growth that has seen online use of BNPL hit $316 billion by 2023 has recently been met by headwinds in terms of rising interest rates, impending regulatory action in Europe, North America and Asia and souring investor sentiment which has sent BNPL company valuations tumbling.
However, this year’s report projects growth of 9% per annum out to 2027, meaning that BNPL will retain its current share of 5% of e-commerce spending world-wide.
Other dynamics show a new era in payments
Prepaid cards, currently thriving in a wide variety of use cases from private-label gift cards through to government benefits, are projected to exceed $1 trillion in global transaction value for the first time this year, up $33 billion from last year.
They’re proving so popular because they help consumers address concerns about privacy and make excellent gifts, as well as being handy for those travelling for business or as tourists.
As some payment methods such as digital wallets and prepaid grow in popularity, however, others wane.
One example of the latter is post-pay, a type of payment that allows consumers to shop online and pay at affiliated stores or ATMs using vouchers.
While it remains popular in the cash-heavy markets of Japan and Latin America, where it accounted for 4% and 5% of e-commerce transactions by value respectively, the overall shift away from cash and upturn in global financial inclusion has seen this method decline rapidly in markets such as Argentina (down 45% in four years) and Brazil.
Overall, PostPay has declined 13% globally in terms of online transaction value since 2019, signalling a sunset period for this payment method.
Learn more about the dynamics of the global payments market and how they could affect your business – download The 2024 Global Payments Report from Worldpay.
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