Banking Apps & Digital Wallets: In High Demand

Trends & Forecast: Digital Wallet & Banking Apps

  • By the close of 2023, 1-in-3 US consumers used a mobile banking app or digital wallet to send or receive a payment.
  • More than half (53%) of people use digital wallets more often than traditional payment methods.
  • Forty-seven percent of Americans say they spend more money when using digital wallets compared to traditional payment methods.
  • Fifty-one percent of people say they would stop shopping with a merchant that doesn’t accept payments from digital wallets.
  • Over 70% of people said they would make digital wallets their primary method for shopping, while another 62% said they would for travel.
  • In the U.S., consumer use of tap-to-pay options has increased in recent years, approaching an estimated $300 billion across Apple Pay, Samsung Pay and Google Pay.
  • Digital wallet spending will surpass $10 trillion in 2025, an increase of $4.5 trillion in less than five years.

Source: Forbes Magazine. August 25, 2023. https://www.forbes.com/advisor/banking/digital-wallets-payment-apps/

 

Declining Cash Payments

The Federal Reserve’s latest Diary of Consumer Payment Choice revealed that cash was used for 18% of all payments in 2022, a slight dip from 2020 and 2021.

Growing Momentum Of Open Banking

Open banking is a system that allows customers to share their financial data such as account balances, transaction history and payment details with authorized third-party providers. The application programming interfaces that underpin open banking allow the secure access and exchange of customers’ financial data. This not only provides consumers with greater control over their financial data but gives them the ability to share data with fintechs and other financial services companies to gain access to tailored financial solutions.

With this promise of innovative and personalized financial products, services and solutions, open banking is gaining momentum. Juniper Research predicts the value of global open banking payment transactions will increase from $57 billion this year to $330 billion by 2027. Open banking use cases such as personalized loan offerings, bill payment, investment platforms and budgeting apps are driving this growth.

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