Mobile Wallets: The New Frontier for Consumer Payments
As the digital age continues to evolve, mobile wallets are becoming more popular among consumers, causing a significant shift in the payments industry. According to the 2026 World Payments Report by Capgemini, non-cash transactions are expected to rise from 1,685 billion in 2024 to 3,540 billion by 2029, with digital wallets and Account-to-Account (A2A) transfers gradually replacing traditional card payments. This shift is fueled by changes in how people shop, such as the growth in e-commerce, mobile commerce, and agentic commerce.
Consumer Adoption of Mobile Wallets
A recent report by LendingTree found that almost two-thirds of Americans have used a mobile wallet, and about a third of these users spending more through it than with a physical card. Among mobile wallet users, 43% preferred the faster checkout, 16% appreciated the increased security, and 11% disliked carrying physical cards. In fact, 43% of users believe mobile wallets are safer than physical cards. The report also revealed that the use of mobile wallets varied across different age groups, with Gen Zers and millennials leading the pack.
Global Dominance of Digital Wallets
Research from Juniper Research predicts that the number of digital wallet users globally will increase from 4.5 billion in 2025 to more than $6 billion by 2030 — a 35% increase over the next five years. This growth, however, is likely to spark increased competition among wallet providers.
Changing Consumer Preferences in Credit Card Selection
Lauren Taylor, global leader for BCG’s Center for Customer Insight, believes that banks are currently underestimating the influence of social media and video streaming platforms in consumers’ decisions. She advises banks to invest more effort in understanding what influences consumers to determine where they should be focusing their advertising dollars.
Are Physical Cards Becoming Obsolete?
Data from LendingTree shows that 64% of mobile wallet users expect to still carry a physical card or wallet in five years. However, Gen Z consumers are the least likely to use physical cards in the future, with 25% saying they don’t expect to carry them five years from now.
Expanding Payment Options Within Digital Wallets
Digital wallets accounted for 53% of e-commerce transaction value in 2024 and are projected to reach 65% by 2030, according to Capgemini. Banks need to recognize that customers have multiple other ways to pay besides traditional cards. Other options, including buy now/pay later solutions, are growing in popularity, with BCG research showing that 30% of U.S. consumers use some form of BNPL solutions.
The ability to pay with cryptocurrency is also reshaping consumer behavior and shifting usage away from cards within mobile wallets. OpenAI’s World project and Stripe are just a couple of examples of companies introducing innovative crypto-payment solutions, further broadening the capabilities of mobile wallets.
As mobile wallets become more commonplace, banks must adapt to stay competitive. By understanding and responding to the changing preferences and behaviors of consumers, banks can ensure they remain relevant in this new digital payments landscape.
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