Digital wallets are fast becoming consumers’ preferred way to pay, both in and out of the store.
Almost two-thirds of US smartphone users will use a mobile wallet app to transact monthly in 2024, up from half in 2021, per our forecast. And total smartphone-based spending will top $1.185 trillion, compared with $7.548 trillion in total retail sales. We expect in-store tap-and-pay transactions to contribute 58% of that mobile spend, with internet-based (wallet, app, and browser) smartphone retail sales making up the remainder.
Digital wallet sales growth will benefit from newly introduced features that boost user loyalty and purchase conversion.
Commerce management tools incentivize consumers to centralize purchasing within their wallet of choice. Examples include PayPal’s digital smart receipts (stored and searchable in-wallet), its package tracking (offered even for purchases made outside the wallet), and Apple Pay’s debit card balance and transaction history integrations.
Payment method optimization can help consumers choose the card that delivers them the most benefit. The new Paze digital wallet, for example, can recommend stored card options—such as a co-branded travel credit card when purchasing an airline ticket—at checkout. This more closely aligns card rewards and benefits with the type of purchase a user makes.
Passwordless checkout removes friction. Wallets, from Apple to PayPal to Paze, are introducing passwordless authentication that can be applied across mobile operating systems.