Spending through digital wallets will exceed $10 trillion in 2025 worldwide, according to a research by Juniper Research Ltd.
The figure is an 83% increase from $5.5 trillion in 2020. The U.K.-based research provider said the increased adoption of digital payments during the COVID-19 pandemic will drive the growth in digital wallet spending.
The research also found that contactless and e-commerce payments will increase to 50% of total wallet spend in 2025 from less than 36% in 2020. More than 34% of mobile handsets are also seen to use contactless payments in 2025, up from 11% in 2020.
Juniper Research said merchants are faced with challenges, such as integration costs for multiple wallets, as the availability and adoption of digital wallet use rise.
"Merchants must base their payment strategies around wallet acceptance in order to support a digitally engaged addressable market, but must also judge the right wallets to target, or they will be lumbered with increased costs and limited benefits," research co-author Alexandria Sadler said.