Dive Brief:
- Digital wallet use in the U.S. is projected to overtake debit cards in transaction value for in-store payments by 2027, according to a Thursday report from merchant payments processor Worldpay.
- Worldpay projects the debit percentage of point-of-sale transaction value will drop to 23% in 2027 from 28% last year, while the percentage point use of digital wallets is expected to more than double to 31% by 2027, from 15% last year.
- “I think most people would be surprised at the growth rate and the penetration of digital wallets not only domestically but really globally,” Worldpay General Manager Jason Pavona said in a Tuesday interview.
Dive Insight:
Cincinnati-based Worldpay provides services to merchants worldwide. This year, it was spun off by Fidelity National Information Services, with a majority stake sold to the private equity firm GTCR.
“Two or three years ago, I think, there was not many people that would have their default being using an Apple phone to pay, and now it's really become ubiquitous,” said Pavona, who oversees North America enterprise for Worldpay.
Thursday’s report also projected a decline in the percentage of point-of-sale transaction value for credit cards, from 41% in 2023 to 34% in 2027. That would almost tie it with digital wallets for share of point-of-sale transaction value.
Despite the projected shifts away from physical card usage for in-store purchases, U.S. consumers aren’t likely to turn away from credit or debit cards wholesale because they’ll still be tied to digital wallets, according to the report.
“In card-dominated markets, card spend is simply shifting to digital wallets like Apple Pay, Google Pay and PayPal,” the report said. “Viewed in total, card transaction values are at an all-time high and continue to rise,” the report said.
The shift that is occurring, both in the U.S. and abroad, is away from cash to other payment types, Worldpay Head of Global Enterprise Gabriel de Montessus said in a press release Thursday. “It’s important to understand that digital wallets are merely a mechanism for transmitting a payment,” he said.
Digital wallets already accounted for 37% of U.S. e-commerce transaction value in 2023, putting them ahead of credit cards and debit cards at 32% and 19%, according to the report. Worldpay projects further dominance of digital wallets in e-commerce by 2027, with digital wallets increasing their share of transaction value to 52%, and credit and debit cards falling to 22% and 12%, respectively.
Globally, digital wallets already secured the top spot for share of point-of-sale transaction value, the report said. Wallets accounted for 30% of point-of-sale spending last year, compared to credit and debit cards at 27% and 23%, respectively. And by 2027, wallets are projected to account for 46% of that spending, about $19.6 trillion, more than credit and debit cards combined.
