This is it. I’m testing the depth of water with both feet. My first ever article on Crypto. One thing I do promise is to make my article as brief as possible. Let’s dive in…
The Wallet
In order for Crypto to go mainstream, one indicator we need to look at is the utilization of the wallet that holds the currency value and enables the exchange of value. The logic for this is simple enough. Higher utilization create greater awareness and greater awareness further increases utilization until a critical mass is reached and it becomes a norm to use crypto wallet for daily transactions.
However, before we delve into crypto wallet, which is still relatively new, Let’s look at some data from another wallet that is somewhat similar to a crypto wallet in that it holds value and facilitates the transaction of this value. It is none other than the digital wallet or e-wallet that many of us are already familiar with. The reason for doing so is to show the general increase in trust in using digital wallets. Rest assured, I’ll follow up with another article on crypto wallet.
So, let’s have a look at how consumers are warming up to e-wallets and the utilization of mobile contactless payments.
E-Wallet Trend
In a 2018 finder.com survey, it was found that an estimated 110 million Americans have,
swapped cash and credit for digital wallets at least once.
What is driving this switch to e-wallet?
The ease of money transfers. No need to go to the nearest bank or ATM to withdraw or deposit money. It’s in real time. Money changes hands in seconds. And best of all, there’s no bulging wallet to carry around.
The report states that,
about 75% of those surveyed — or more than 80 million Americans — say they use digital wallets because they’re a more convenient option than carrying around dollar bills and credit cards.
As evidenced above, this surge in mobile contactless payment adoption in recent years is driven by ease of use and convenience.
More recently, the COVID-19 Pandemic caused lock-downs and curfews leading to an increase in online transactions as people resorted to digital payments for bills and groceries.
According to businessinsider.com,
Global e-commerce sales posted their biggest increase of the pandemic thus far in June, with volume increasing 31% annually — up from 23% in both April and May, per ACI Worldwide.
(Image Source: www.businessincider.com)
These trends will only drive the adoption of e-wallets. Consumers are being driven to a cashless economy whether willingly or unwillingly.
According to a report in statisca.com, it is predicted that contactless payment users will grow to 760 million users in 2020 globally.
The same report mentioned that in the United States alone, the number of mobile payment users is projected to be over 70 million before 2021. This increase adoption is expected to generate over US$220 billion in transaction value by 2023.
In 2019 the U.S. mobile payment penetration was at 29% compared with China’s 81%. Due to this higher rate of adoption, China’s total transaction value for mobile payment is forecasted to reach US$755.5 billion in 2020.
Let’s look at another country, Indonesia. Who would have thought of looking at Indonesia in relation to the topic of mobile payment? Well, surprisingly, the total e-wallet transaction value in Indonesia is expected to hit US$15 billion by 2020.
(Image Source: www.theasianbanker.com)
Closing Thoughts
By itself, the above data may not indicate much. To put things in perspective, we take a look at what we understand and use frequently. Yes, I’m talking about the credit card. And yes, some of us own more than one.
(Image Source: www.nilsonreport.com)
The Global Credit Cards transactions in 2019 for the top 3 card issuers (Visa, Mastercard & Unionpay) totalled US$425.1 billion. You can find the details on the Nilson Report’s June 2020, issue 1178.
As you recalled, China’s mobile payment alone is projected to be more than US$755 billion in 2020. This may not mean much. However, when you take into consideration that it took the credit card more than 80 years to reach this level of adoption and usage, you can see the impact that the mobile wallet is already making.
I believe that the e-wallet is a pre-cursor to the crypto wallet. They are so similar and yet worlds apart. Whereas the e-wallet is convenient to use, it’s still pretty much just a store of monetary value and an instrument for transactions. On the other hand, the crypto wallet is so much more than that. It not only does what the e-wallet can do; it offers the user many more benefits amongst which is an avenue to generate income.…and that’s the topic for another article.
Resources:
The rise of digital wallets - Olivia Chow, June 28, 2018 (https://bit.ly/34FWDY1)
How COVID-19 Increases Digital Payment Adoption Globally – Mitesh Patel, April 22, 2020 (https://bit.ly/3gBswDA)
Mobile payments in the United States - Statistics & Facts - J. Clements, Aug 12, 2020 (https://bit.ly/2YI8DEO)
Mobile POS Payments (https://bit.ly/3gCOw0w)
Total e-wallet size in Indonesia likely to hit $15 billion by 2020 - Leo Timones, June 23, 2019 (https://bit.ly/3b3i3iW)
Global Network Cards in 2019 - Nilson Report, June 2020, Issue 1178 (https://bit.ly/32ylV7F)
A special thanks to Valentin Antonucci for the Header Image. His collection of photographs can be found here.
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