Mobile Wallet Use On The Rise at the Detriment of Cash & Cards

Cash spend dipped to all-time lows last year as shoppers changed their favorite payment method to contactless avenues e.g., mobile wallets, according to Worldpay’s 2021 Global Payments Report.

Worldpay, an FIS Inc. subsidiary, revealed that cash purchases made up only 20.5 percent of the globe’s POS (point of sale) volume in 2020 plummeting from 30.2 percent in 2019.

In North America, cash spend made up 11.4 percent of the POS payments, a dip from 2019’s 14.6 percent. The drop in cash usage is expected to persist. By 2024, cash spending at North America’s points-of-sale will reduce to 8.7 percent, the report says.

As cash spend reduces, prepaid cards and mobile wallets take over as the major ways to pay. Mobile spending at the POS accounted for a 9.6 percent share in 2020, a significant 60 percent jump from 6 percent in 2019. The same report predicts mobile wallet spend will continue growing to touch 15.5 percent of POS transactions. 

Prepaid cards grew more than twofold as a portion of POS transactions making up 3.9 percent in 2020 compared to 2019’s 1.9 percent. The increased use is mainly linkable to their use as a way to distribute Coronavirus relief funds.

 According to the study, the continuing use of these cards for public disbursements and more use for corporate spending and real-time gig-economy transactions will see prepaid cards grow stronger. The boom of eCommerce sales throughout the health crisis also has a positive impact on mobile wallets. 

These wallets made up 29.3 percent of North American e-commerce payments, a jump from 2019’s 23.7 percent. The report predicts this share will touch 40.5 percent in 2024. 

Debit cards are slowly gaining ground on the e-commerce front, even threatening to surpass credit cards. Credit cards, which remain the staple payment method for eCommerce spend made up 32 percent of these payments last year, a dip from 34.4 percent in 2019. Meanwhile, debit cards contributed to 20.1 percent of eCommerce spend in 2020, a jump from to 17.6 percent in 2019. 

Author Bio

Payment industry guru Taylor Cole is a passionate payments expert who understands the best merchant account offers. He also writes non-fiction, on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie with ice cream on his backyard porch, as should all right-thinking people.