Mikael Lijtenstein, CEO of AstroPay, says digital wallets will be the world’s preferred way to pay – but consumers, merchants and PSPs need better service in cross-border transactions.
At AstroPay, we believe digital wallets are the future. There are two reasons for this: firstly, wallets are much more flexible than cards in their functionality, with the capacity to update and add functions “over the air”, like other apps.
Secondly, digital wallets are more secure than cards, with a level of physical protection cards lack.
Wallets and their smart phone platforms can be locked with Personal Identification Numbers (PINs) – to say nothing of the heavy encryption that digital wallets apply to user’s financial information.
Users world-wide, especially younger users, are responding to this flexibility, ease of use and superior security in their droves.
More than half of digital wallet users are under 40 and transaction volumes are set to rise strongly.
By 2028, MarketWatch predicts the global digital wallet market will reach $32.75 billion, representing year-on-year growth of almost 19% over the next five years[1], compared to growth in card usage of between 1 and 4 percent over the same period.
Such success notwithstanding, research from PCM predicts[2] cards will still constitute around 50% of all electronic transactions by 2030.
In part, this is due to older consumers preferring cards – but also because digital wallets face acceptance challenges, especially across borders.
Put simply, no single digital wallet solution is currently as widely accepted internationally as cards like Visa and Mastercard.
Furthermore, most digital wallets do not incentivize either customers or merchants with reward programmes like card schemes.
Wallets without borders
“Digital wallets must deliver better choice and service. We need an easy-to-use, flexible wallet that’s secure, internationally accepted and rewarding.”
In a new white paper, we explain the steps some wallet schemes have taken to address these problems.
In the Nordics, successful national wallet schemes such as VIPPS (Norway), Pivo (Finland) and MobilePay (Denmark) are to merge[3], striking an agreement with Visa on international acceptance to expand usage in cross-border transactions.
However, such agreements serve relatively small (in this case, 18 million people) numbers of consumers.
Our new white paper, Solving cross-border payment challenges for Europe’s merchants, PSPs and consumers argues digital wallets must deliver better choice and service to consumers. We believe the market needs an easy-to-use, flexible digital wallet solution that’s internationally accepted, secure and rewarding.
At AstroPay, we’ve developed a wallet that simplifies cross-border acceptance for merchants via a single API for accepting transactions and receiving funds.
This encourages more conversions and increases the range of consumers merchants can reach thanks to more than 200 different payment methods supported.
Meanwhile, users benefit by making transactions, deposits and withdrawals internationally without having to use a card or pay fees, a fact that encourages more adoption and thus revenue growth for merchants.
Having experienced very rapid growth across Latin America and Africa, AstroPay is now available in Spain, Portugal and the UK.
We plan to expand into more countries in the years ahead.
Our researchers and product developers provide in-depth insight into each market’s user behaviour and payment landscape, helping us to meet the challenges today’s consumers and merchants face in cross-border e-commerce.
To find out more about digital wallets that enable cross-border payments growth, download our white paper here.
[1] See MarketWatch, 06 January 2022: “Digital Wallet Market Size, Share 2022-2028”
[2] See “The Digital and Card Payment Yearbooks 2021-2022 – European Overview”
[3] See Life in Norway, 30 June 2021: “VIPPS to merge with Nordic payment schemes”
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