Decoding the European Mobile Wallet Evolution
The prevalence of Mobile Wallets has risen exponentially over the last two years, stemming from the rapid growth of smart-phones, technological advancements in payment acceptance, government initiatives to support a more cashless society and consumer desire for convenience and speed.
A mobile wallet, also known as a digital wallet, virtual wallet, and e-wallet, is a digital way to store credit cards, debit cards, and prepaid cards, allowing users to make both online and physical purchases and send peer-to-peer payments using a smart device. Initially, mobile wallet adoption faced some challenges, including low levels of acceptance, restricted connectivity and evolving regulatory challenges, however, this has shifted in the past two years.
In a study1 across nine European countries to understand this evolving payment frontier and its opportunities, Visa found shifting behaviours, technological evolution, growth of wallet providers and higher merchant adoption are propelling the mobile wallet evolution. Key findings showed that:
• Europe has a high mobile wallet penetration and that usage differs by specific country. A significant majority of Europeans (72%) actively engage with mobile wallets; our research shows Nordic markets (Norway, Sweden, Denmark, Finland) and Switzerland are leading the way for adoption. In these markets mobile wallet usage ranges from 83% to 94%, 10-15% higher than the European average.
• A portion of Europeans (32%) plan to rely exclusively on mobile wallets in 2023, showing the next stage in the wider adoption of mobile wallets will be driven by wallet-only users or those who no longer use traditional payment methods.
• Mobile wallet usage now reaches across all generations - initially in 2020 Gen Z and Millennials took the lead in mobile wallet usage, now the landscape has rapidly transformed over the past two years, witnessing widespread adoption with Gen X (69%) and Baby Boomers (62%), highlighting the broad reach of mobile payments.
Key Drivers for Adoption
The report also identified several key drivers that influenced the adoption of mobile wallets across Europe, including:
• Rising expectations for convenience and speed. In today’s age of financial convenience, it is essential to meet consumer’s needs instantly and ideally on their preferred terms. The convenience and ease of a smart device payment method, capable of storing payment information for multiple bank accounts, resonates strongly with these expectations. Moreover, they provide fast, secure, and reliable payment options for consumers and businesses.
• The growing popularity of cross-border transactions. The demand for cross-border payments is rising as businesses and customers seek convenient, trustworthy, and secure digital solutions for conducting commerce across borders. According to the Bank of England Global Outlook, with the increasing consumer demand for goods and services and the expanding capabilities of industries in emerging markets, cross-border payments are expected to grow to over $100 trillion globally in just ten years2.
• Technological advancements fueling mobile wallet payments. The growth of mobile payment and wallet technologies is attributed to advancement in wireless technology, such as 4G and 5G capabilities and near field communications (NFC) enabled in Point of Sale (POS) systems. The wide adoption of smartphones has supported use and accessibility for mobile wallets, as the user base for mobile wallets has grown significantly.
• Government initiatives to promote the shift to digital. Governments are implementing policies to promote digital payments, such as the Swedish government’s marketing and public information campaign to incentivise reduced cash usage, that led to the launch of the domestic wallet, Swish. The European Commission has also been seeking to ensure the EU’s financial sector is fit for purpose and capable of adapting to the ongoing digital transformation. The European Commission aims to achieve this through revising the Payment Services Directive.
Today, the landscape is evolving as domestic wallets (in country bank owned digital wallet providers) expand outside of their home country to neighbouring countries. Looking to the future, Visa aims to partner with wallet providers to create a thriving and innovative in-market environment benefiting consumers and wallet providers alike.
To gain a deeper understanding of the macro trends driving adoption, mobile wallet usage patterns, mobile wallet provider performance, coverage, and penetration as well as the drivers of consumer decision-making with mobile wallet provider usage please click here to download the “Decoding the European Mobile Wallet Evolution: Consumer Adoption and the Future of Wallets”. Or use the QR code below.
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Case studies, statistics, research and recommendations are provided “AS IS” and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. Visa Inc. does not make any warranty or representation as to the completeness or accuracy of the Information within this document, nor assume any liability or responsibility that may result from reliance on such Information. The Information contained herein is not intended as legal advice, and readers are encouraged to seek the advice of a competent legal professional where such advice is required.
1 Visa conducted a study in collaboration with Ipsos across nine European countries, involving qualitative and quantitative research on consumer adoption and the future of wallets with over 9,000 consumers participating. Full methodology outlined within the whitepaper.