The Rise of Digital Wallets in the Financial Services Industry

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There are more than 3 billion digital wallet users globally, up roughly 1 billion since 2016. We think that over the next couple of years, so in 2030, we think there will be over 5 billion digital wallet user, which will equal roughly 65% of the world's population. So all in all digital wallets are growing their user bases at a never seen before in a rapid pace that's unprecedented in the financial services industry.

Welcome to the Big Ideas Monday Miniseries, brought to you by the For Your Innovation Podcast.

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This week’s Big Ideas Monday Mini Episode focuses on Digital Wallets.

Having onboarded billions of consumers and millions of merchants, digital wallets could transform the economics associated with traditional payment transactions, saving them nearly $50 billion in costs.

With 3.2 billion users, digital wallets have penetrated 40% of the global population. ARK research suggests that the number of digital wallet users will increase 8% at an annual rate, penetrating 65% of the global population by 2030.

As consumers and merchants adopt digital wallets, the usage of traditional checking accounts, credit and debit cards, and direct merchant accounts should decline, disrupting traditional payment intermediaries.

Cutting out middlemen, digital wallets could facilitate closed-loop transactions for more than 50% of their payment volumes, potentially adding $450 billion to the current $1 trillion in digital wallet enterprise value by 2030.

Watch the video version here.

Sources: ARK Investment Management LLC, 2023. Forecasts are inherently limited and cannot be relied upon. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Past performance is not indicative of future results.