Digital wallets eclipse cash globally at POS for first time during pandemic, FIS study finds

According to the press release, the annual Global Payments Report by Worldpay from FIS examines current and future payment trends across 41 countries. Findings from the 2021 report show that lockdowns, shelter-in-place orders, and personal safety measures during the global health crisis accelerated the shift toward digital payment methods in every area of consumer spending.

Furthermore, regarding in-store payment trends the FIS report found:

• Globally, use of mobile wallets exceeded cash for the first time for in-store payments. Cash usage dropped 10 percentage points in 2020 to account for just one-fifth of all face-to-face payments worldwide.

• Use of cash for in-store payments fell by half or more in Canada, the UK, France, Norway, Sweden, and Australia.Cash payments in the US made up USD 1 trillion of in store payments in 2020, down from USD 1.4 trillion in 2019.

• The Asia-Pacific region continues to lead in the use of mobile wallets at point-of-sale, with about 40% of in-store payments in that region now being done through contactless payments. However, use of mobile wallets accelerated across all regions in 2020 and now accounts for about 10% of payment methods in North America, 8%  in Middle-East-Africa, 7%in Europe, and 6% in Latin America.

• The report projects that by 2024, cash will account for less than 10% of in-store payments in the US and just 13% of payments worldwide. Over that same time period, the report projects digital wallet payments to account for more than a third (33%) of all in-store payments (16% in the US).

Some ecommerce trends the report mentions:

• Total ecommerce spending grew globally 19% last year to USD 4.6 trillion in value. That growth was the highest in the past five years and represented two-to-three years of typical acceleration in a single year. Analysis shows global ecommerce spending could grow to USD 7.3 trillion by 2024.

• Globally, usage of digital wallet-based transactions in 2020 grew 7%. By 2024, the report projects that digital wallets will account for more than half of all ecommerce payments worldwide.

• The reports shows that the adoption of buy-now-pay-later transaction methods continues to rise rapidly in Europe and North America and is expected to double by 2024.

• Conversely, usage of traditional payment methods such as cards and cash-on-delivery are quickly losing share and expected to account for less than 40% of ecommerce transaction payment methods by 2024.