Digital wallets continue to lead the array of payment methods, US financial technology company FIS mentioned in its 2022 Global Payments Report, with the Asia Pacific (APAC) as the front runner driven by Alipay and WeChat Pay.
FIS said digital wallets made up almost half (48.6%) of global e-commerce transaction value in 2021 at just over$2.6 trillion. By 2025, wallets could comprise 52.5% of transaction value.
In APAC, digital wallets represented 68.5% of regional e-commerce transaction value for 2021, and could exceed 72% by 2025. The report added that digital wallets are consumers’ payment method of choice in China with Alipay and WeChat Pay combined comprising about 83% of last year’s e-commerce transactions.
Digital wallets are also the most popular e-commerce payment method in India (45.4%), Indonesia (38.8%) and the Philippines (30.5%). Meanwhile, GCash, GrabPay, LINE Pay, OVO and Paytm add to the diverse and competitive payments ecosystem.
The report also showed the shift from cash and credit cards’ and toward digital wallets and buy now, pay later (BNPL). Credit’s share of global e-com spend is projected to fall from 21% in 2021 to 18.8% in 2025, though absolute value could exceed $1.56 trillion.
Debit on the other hand could slightly slip from 13.2% of e-commerce transaction value in 2021 to 12.9% in 2025, with absolute value rising to over $1.07 trillion. Bank transfers only accounted for 7.4% of global e-commerce transactions in 2021 and may decline to 6.2% by 2025.