Digital wallets and Visa Direct — From want to need

By Pankaj Sharma, Global Product Lead, Visa Direct Wallets ,  08/07/2023

No longer a clunky lump in our pockets, wallets have settled into a new home — our phones. By now, digital wallets have become something we’re all at least familiar with, if not already incorporated into our own spending habits. But how did we get from a feature understood almost exclusively by Silicon Valley loyalists to a necessity that has generations of people leaving their paper and plastic at home? Where will digital wallets go from here? The answer to both questions is accessibility. While convenience has become the driving force in skyrocketing the popularity of digital wallets, accessibility was — and still is — at the heart of its innovation.

From Nice-to-Have to Need-to-Have

In the early life of digital wallets, the primary goal was to serve the unbanked populations with access to low-cost mobile phones. As 1.4 billion adults remain unbanked¹ today, that pursuit is as relevant as ever. Yet, in that hunt for inclusion, digital wallets were found and embraced by the tech-native generations of Millennials and Gen Z, which boomed digital wallets into industries beyond banking and made them a preferred form of payment.
 
The proverbial fire starter of digital wallets’ popularity came in 2019, where they surpassed credit cards to become the most widely used payment type globally.² This can be heavily attributed to the rise in convenience and accessibility enabled by multiple use cases in the ecosystem including P2P, inbound cross-border payments and merchant payments, amongst others. Where cash was once king, mobile payment apps digitally connected us to our peers and other small vendors. Fuel was added to the fire just a year later when COVID-19 made us rethink our past behaviors when it comes to spending and sending money. Tools like QR codes, loyalty points, cross-border usage and better interest rates all came together to transcend digital wallets in developed markets from inclusion and access to preference and convenience.
 

The Future Is More Together Than Ever

After all that growth, what does the future of digital wallets look like? Connection and accessibility continue to form the heart of digital wallet innovation — what comes next is bigger and better. As more wallets continue to pop up and usage rates continue to rise, a true global connection revolving around payments has never been more needed.

Global digital wallet volume is projected to reach $12 trillion annually by 2028.³ As the digital payments market continues its steady growth, Visa is committed to growing and connecting a global community of digital wallet users and financially empowering millions along the way. Our vision for that future will be realized through delivering improved cross-border payment capabilities to our clients and their customers with a seamless ability to pay and get paid regardless of where you live or what wallet provider you use. Today, Visa Direct enables clients to connect to nearly 7 billion endpoints in 190+ markets with payouts in over 160 currencies. The latest examples are Visa’s strategic collaborations with TerraPay and Thunes, which enable cross-border transfers to digital wallets around the world.

“The world is universally becoming mobile-first, and bringing mobile wallets closer to the Visa ecosystem via Thunes’ payments infrastructure drives convenience and value for consumers and small businesses.”

— Peter De Caluwe, CEO, Thunes
Visa is continuously working to expand that reach and remove the barriers of global money movement for our clients and their end customers. Building on our network of networks strategy, we’ve invested in our own capabilities with Visa+ and Visa Alias Directory Service, as well as strategic collaborations with digital and mobile payment providers like Thunes and TerraPay, to expand the reach of Visa Direct and deliver even stronger domestic and cross-border payment and connection capabilities to our clients.

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  1. World Bank Group, Global Findex Report, 2021–2022.
  2. Boku and Juniper Research, Mobile Wallets Report. Juniper Research conducted an online survey of more than 5,000 mobile wallet users across Brazil, India, Indonesia, Japan, and Russia in April and May 2021.
  3. Boku and Juniper Research, Mobile Wallets Report. Juniper Research conducted an online survey of more than 5,000 mobile wallet users across Brazil, India, Indonesia, Japan, and Russia in April and May 2021.
  4. Actual fund availability depends on receiving financial institution and region.