Digital wallet hit 4.4 bn

A new study has found revenue from tokenisation provisioning and management in mobile payments will exceed $53 billion in 2025, from $18 billion in 2020.

The report found tokenisation, where account details are replaced with data useless to fraudsters, is taking hold in both in-store and remote commerce.

This strong growth, of over 180{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}, will be fuelled by increased use of OEM Pays in both in-store and remote commerce, as well as increasing adoption of tokenisation by digital wallet providers and their tighter integration into app checkout processes.

The research recommends that digital wallet providers move to implement tokenisation immediately, if not already, and prioritise acceptance to increase security in checkout processes.

A separate piece of research found that the number of unique digital wallet users will exceed 4.4 billion globally in 2025; rising from 2.6 billion in 2020.

It found that mobile wallets are leading this 70{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} growth, as mobile payments rapidly scale across geographical and vertical markets. The increasing alignment between in person and remote commerce channels is leading to greater use of mobile wallets than ever before, with online wallet use confined to high-value purchases or complex bill payments.

Remote Commerce to Account for Majority of Tokenisation Revenue

The tokenisation research found that revenue from remote payment tokenisation will equate to 58{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of total mobile payment tokenisation revenue in 2025. However, this compares with 84{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in 2020.

As mobile contactless payments are tokenised by default, accompanying tokenisation revenue is accelerating rapidly, with contactless enjoying boosted growth following the pandemic.

Merchants should take note of this trend and undertake complete reviews of their processes to ensure that they are offering a highly capable mobile app. This must be inclusive of a seamless checkout process, the correct mobile wallet integrations and high levels of security, or they will lose out to more mobile-adept merchants.

QR Code Payments Leading Wallet Use

The research also found that QR code payments will account for 40{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of all digital wallet transactions globally in 2025; a fall from 47{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of transactions in 2020. QR code payments are presently playing a leading role, due to their ease of use and acceptance, which makes them a critically important area for wallet use. However, over the next five years, the evolution of features such as card acceptance via NFC smartphones will begin to close the ease of acceptance gap.

Persistent Tokens Gaining Ground in Remote Payments

The use of persistent tokens is increasing in remote payments; accounting for 52{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of tokenised remote mobile payment transactions in 2025, from 41{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in 2020.

The report identified that the increasing dominance of digital wallets that use persistent tokens in e-commerce is driving this growth. As such, the report recommends that tokenisation vendors focus on token management systems to ensure that managing persistent tokens is as efficient as possible.

“Tokenisation is quickly becoming ubiquitous for mobile payments; reflecting the need for mobile payments to offer superior security features,” says Susan Morrow, Research co-author.

“Tokenisation vendors must offer simple and compliant token provisioning and management solutions, in order to capitalise on the rapid growth in mobile payments usage.”