The use of electronic wallets has surpassed debit card use in the US by seven percent, according to a new report from Worldpay. And what’s more, the payments company anticipates the e-wallets will overtake credit cards within the next five years.
Despite this impressive growth, in Worldpay’s estimation, the US e-wallet market is actually lagging a little behind the global one. Between 2017 and 2021, the US market is expected to have a CAGR of 9.8 percent, while the global market will see a CAGR of 11.1 percent over the same period, with e-wallets accounting for 45.9 percent of the payments market in 2021. That’s because the US market isn’t growing as fast as it used to, while Latin America will see a CAGR of 19 percent over the forecast period, and APAC will see a 12 percent CAGR. The EMEA regions, meanwhile, will grow at a rate of 10 percent.
Concerns about security remain a market obstacle, at least when it comes to online payments. Worldpay says that while 76 percent of Americans have internet access, almost 33 percent “avoid online payments due to concerns over data security – a potential explanation for North America’s slow e-commerce growth rate,” according to the report.
But given that major financial services providers are starting to embrace sophisticated security technologies like biometric authentication, it’s an obstacle that could be overcome to a considerable degree in the coming years. Such security mechanisms are already in place on mobile payment platforms like Apple Pay and Samsung Pay, and Worldpay says such platforms “are gaining more acceptance and earning consumers’ confidence as their popularity and usage increases,” marking “rapid growth” in this area.