Dive Brief:

• Digital payments spending online and in-person has surged worldwide from $1.7 trillion in 2014 to $18.7 trillion in 2024, according to Worldpay’s 10th Global Payments Report.
• Spending via digital payment methods, including digital wallets, buy now, pay later services and account-to-account payments, are predicted to surpass $33.5 trillion by 2030, according to the report Tuesday. However, U.S. consumers use mobile wallets for only about four in ten (39%) of their online purchases and 16% of in-person transactions, a smaller share than the 81% of e-commerce payments and 59% of point-of-sale transactions in the Asia-Pacific region.
• About two-thirds (67%) of all U.S. consumer purchases online and at points-of-sale were transacted via credit, debit and prepaid cards. Cash use in the U.S. fell from 44% of in-store spending in 2014 to 15% in 2024, the report found.

Dive Insight:

Payment provider Worldpay attributes the growth of digital wallet use in the U.S. to the COVID-19 pandemic. In the near future, digital wallets will play a more significant role in both e-commerce and point-of-sale payments and will be funded primarily by credit and debit cards, the report predicts.

By 2030, digital wallets are expected to comprise more than half (52%) of e-commerce transactions and 30% of point-of-sale transactions, according to the report. By contrast, the report predicts that credit cards will comprise only 22% of e-commerce transactions and 32% of point-of-sale purchases in 2030, down from 40% of online purchases and 48% of point-of-sale purchases in 2014. 

As U.S. consumers increasingly adopt mobile wallets, cards remain a critical part of digital wallet usage in America and abroad. The report from Cincinnati, Ohio-based Worldpay notes that seven in ten digital wallets in the U.S. are funded by cards, tied with Australia (70%) and followed by the U.K. (67%), India (56%), Brazil (53%) and China (46%).

As for America’s attachment to cash, Worldpay’s report indicates that cash usage has been declining in the U.S. and will continue to drop in the coming years.

While a fifth of U.S. transactions were cash-based in 2014, that share fell to 11% last year, according to Worldpay’s report. By 2030, U.S. consumers are predicted to use cash for only 9% of transactions, per the report. Though the report categorized the U.S. as a medium-cash use country, other countries, such as Germany, Nigeria and Mexico, were categorized as high-cash use markets or low-cash use markets like South Korea, China, Sweden and Finland. 

“A confluence of factors — advancements in smartphone technology, the exponential growth of fintech, and supportive regulatory frameworks — combined with changing consumer expectations for ease and convenience, have fundamentally transformed the way we make payments,” Adam Coyle, chief strategy officer at Worldpay, said in a statement.

Other reports illustrate Americans’ cash use. Last June, the Federal Reserve’s annual cash use survey found that about a third (32%) of consumers used credit cards for their payments, followed by 30% who used debit cards and 16% who used cash. 

One possible driver of mobile wallet adoption in the U.S. is businesses integrating digital wallet capabilities. Large companies saw digital wallet usage spike from 48% in 2022 to almost two-thirds (64%) in 2023, according to a survey from the Federal Reserve’s financial services unit. Service businesses also saw their digital usage rise from 43% in 2022 to 61% in 2023, the survey found. 

Another factor in the growing adoption of mobile wallets is the perception that they are more secure than other payment methods.

A 2023 J.D. Power survey found that the proportion of consumers who use digital wallets rose from 12% in 2022 to 48% in 2023. While the survey found that consumers under 40 have been using digital wallets due to perceived security, cybersecurity experts say that the payment method still carries vulnerabilities.

Because digital wallets can contain far more personal data than consumers’ card information, they are an even more enticing target for fraudsters, Sunny Thakkar, head of fraud and disputes at Worldpay, told Payments Dive in December. 

Worldpay’s report also offered some insight into the dominant card issuers. Visa captured 63% of the card share in 2023, Mastercard was second at 25%, followed by American Express at 9%. Discover Financial Services— which is seeking to sell itself to Capital One for $35.3 billion — comprised only 1%, per the report. If approved, the larger Capital One could challenge Visa’s dominance.