Despite the growth in digital payments, cash continues to hold its ground.
Millennials Lead the Shift Towards Mobile and Digital Payments
A new trend is emerging in the world of payments, with millennials increasingly using mobile and digital payments over cash. This shift is becoming global, as more and more people embrace the convenience and efficiency of digital wallets and mobile banking apps.
According to a survey by the Boston Consulting Group, digitally influenced spending is currently between $45 to $50 billion. This figure is expected to grow, with predictions estimating that digitally influenced payments will grow from 30% to 35% of all retail sales by 2025.
Millennials, in particular, are driving this change. They are digitally fluent and financially active, embracing a diverse mix of payment formats. Mobile wallet penetration is strong among Millennials, especially in Asia-Pacific, Australia, and is growing steadily in Western markets like the US and UK.
Usage of mobile banking apps is very high, with 68% of Millennials in the US primarily using mobile banking apps. When paying bills digitally, about 37.4% of Millennials have used same-day or real-time payment channels, reflecting a strong preference for digital convenience over traditional cash payment.
Globally, digital wallets account for 53% of online purchases and 31% of in-store transactions. Transaction volumes are projected to reach $10 trillion by 2025, with digital wallet users expected to grow to nearly 70% of the world population by 2030.
Mobile commerce has also surged, with about 30% of the global digital population making mobile purchases. Mobile devices account for more than half of all online sales, showing that consumers, including Millennials, favor mobile platforms for payments and shopping alike.
The conventional wisdom that credit and debit cards are necessary but cash is essential in the wallet is becoming outdated. Surprisingly, 52% of young adults say they spend $50 or more in cash a week despite the rise of digital payments. Cash is still preferred by 31% of consumers in stores, even among young adults.
Asia-Pacific continues to lead digital payment transaction volumes due to dominant super-app ecosystems like Alipay and WeChat Pay, while North America and Europe are rapidly catching up. The digital wallet market size is expected to surge to nearly $3 trillion by 2025, fueled by contactless payments, smartphone penetration, and expanded wallet features beyond payments (IDs, loyalty cards).
In conclusion, millennials are a key driving force in the shift towards mobile and digital payments globally. They favor a variety of convenient digital payment methods over cash, and digital payments, especially via mobile wallets and real-time processing, are projected to grow substantially by 2030 across all markets.
References:
- Digital Transformation in Retail: The Future of Retail is Digital
- Mobile Wallets: The Future of Retail Payments
- Millennial Banking: How Millennials Are Changing the Banking Industry
- Mobile Commerce: The Future of Retail
- The Future of Digital Payments: A Comprehensive Guide
- Millennials' preference for digital payment methods, such as mobile wallets and real-time processing, is driving the growth of personal-finance technology, with digital wallet transactions projected to reach $10 trillion by 2025.
- As technology advances, Millennials continue to shape the future of personal finance, with a strong preference for using mobile banking apps and digital wallets, accounting for 53% of online purchases and 31% of in-store transactions.
