Digital wallet transactions slated to hit US$16 trillion in 2028

As digital-based payments become the preferred payment options, a new Juniper Research report highlights that digital wallet transactions are predicted to hit US$16 trillion in 2028, a 77 percent increase from 2023.

In 2023, transactions will be valued around US$9 billion.

According to Juniper, this trend is driven by growth across both developed and developing markets, as the increased adoption of advanced services such as buy now pay later (BNPL), microloans, and personal financial management drive end-user engagement.

The study found that in a highly congested wallets landscape, diversifying their appeal to users is vital.

A digital wallet is a software-based system that can act as a storage mechanism for a user’s payment, identity, loyalty, or ticketing information.

The report identified advanced services as a key source of revenue growth for digital wallets. Advanced services, such as BNPL or microloans, are allowing digital wallet providers to diversify their revenue.

The popularity of BNPL, especially among younger consumers, will draw greater numbers of users, and generate additional revenue. This approach can be seen with Apple’s roll-out of numerous add-on services, including Apple Pay Later.

Michael Greenwood, research author at Juniper said advanced services give digital wallet providers an opportunity to differentiate themselves in a congested market and generate additional revenue.

“Super app strategies, which many digital wallets are pursuing, will rely on the effective deployment of advanced services at scale,” he said.

The research found that security benefits are a key driver of digital wallet use in e-commerce in developed markets. Many consumers do not wish to enter card information online.

With digital wallets, this issue is reduced, as tokenisation enables card and other payment information to be used in a highly secure way.

The research also identified that as digital wallets become broader, including elements of digital identity, convenience will play a greater role; enabling wallet services to act as more of an all-inclusive app for financial wellbeing.