The mobile wallet industry is expected to grow to $2.4 trillion this year, a 24% increase from last year, according to a new report from Finaria, a finance and investment company. The report forecasts the market will grow to $3.5 trillion in value by 2023.
The average value for mobile point-of-sale transactions is $1,670 in 2021, a 25% bump compared to 2019. Over the next two years, the average transaction value is expected to grow by 22% to $2,051, per the report.
Though Asian countries, especially China, are leading the way in mobile payments, the U.S. mobile payments market is the second-largest at $465.1 billion worth of transactions. The U.S. market is slated to grow by 49% to $698 billion in 2023, according to the report.
ApplePay, Google Wallet, WeChat Pay and AliPay are at the forefront of the mobile payment market, according to the report. China's infrastructure facilitated the rapid adoption of mobile payments, and credit and debit cards never gained traction there as they did in other parts of the world. For Western countries, the adoption of mobile payments is accelerating, but cash, credit cards and debit cards remain the dominant forms of payment.
Part of the slow consumer adoption in the U.S. of mobile payments could stem from the slow rollout in stores. Early on in the COVID-19 pandemic, consumers weren't quite using mobile wallet apps as much as expected, according to an April 2020 report from PYMNTS.com. A January 2020 Blackhawk Network report indicated only half of retailers accepted mobile payments in 2018, but 60% of customers surveyed said they wanted to buy goods in-store using their smartphone and accrued loyalty points.
As the U.S. rushed to stem the spread of COVID-19, retailers' adoption of contactless payments accelerated. An August survey from the National Retail Federation found that retailers are increasingly accepting contactless payments and expect greater adoption of the technology in the future.
"As the COVID-19 continues driving a digital transformation of payments, the entire segment witnessed impressive growth in the last year, both in the number of users and transaction value," Jastra Kranjec wrote in the report.
Eyeing the market's expansion, payments companies and retailers have introduced new tools and bought startups in the space. In December, 7-Eleven debuted a mobile wallet that lets consumers make contactless payments at select locations. Earlier this week, PayPal acquired Curv to expand into cryptocurrencies and digital assets, thereby building on the company's strategy to expand its digital wallet capabilities to buy, sell and hold cryptocurrency.