TerraPay: Digital Wallets Will ‘Reshape Entire Financial Ecosystem’

The rise of digital wallets is an opportunity waiting to be tapped. TerraPay President Reuben Salazar Genovez writes in a new PYMNTS eBook, “Beyond the Horizon: How to Identify Unexpected Threats That Could Impact Your Business.”

The biggest albeit unsurprising “wild card” for the future of TerraPay and the global money movement landscape has got to be digital wallets.

The rise of digital wallets is taking place at a brisk pace. While cash is still dominant globally, the growing popularity of digital wallets points to a different future. Analysis from Accenture and FIS shows the significant impact of wallets on global cash displacement, forecasting cash transaction value to decline to around USD 6 trillion by 2026, which will be 10% of all commerce transactions; during the same period, ownership of wallets will almost duplicate to surpass 5 billion. Capgemini predicts that by 2027, new digital payment methods will make up approximately 30% of total global volume, with wallets leading this shift to alternative payments.

As the fastest-growing financial tool, digital wallets have transformed how consumers pay. From merchant POS and eCommerce to utility bills, digital wallets have grown in popularity, with consumers becoming accustomed to the convenience and flexibility of cashless payments. Forbes recently reported that 53% of consumers now use digital wallets more often than traditional payment methods. The consumer is changing. Gen Z and millennial populations prefer the ease and speed of wallets, and in the next few years, they will be the largest workforce and the largest consumer group. This growing appetite for real-time payments will continue to have a major impact on businesses worldwide. A recent report from FIS Worldpay states that the share of transactions of mobile wallets in eCommerce will reach 54% by 2026 and 43% in POS payment methods, by the same year.

Currently, wallets play a crucial role in global payments and money movement, and going forward, they will be pivotal in enhancing the efficiency, security and accessibility of payments, contributing to a more connected and inclusive financial ecosystem. That said, the full potential of wallets can only be achieved when we work together as an industry to solve the existing barriers facing wallet adoption, including the lack of interoperability, integration challenges across multiple markets and more.

At TerraPay, we have a network of more than 2.1 billion wallets. Today, we partner with over 100 wallet providers globally and based on our own estimates the wallets participating in our money movement network are serving approximately 600 million individuals with no access to bank accounts. We have witnessed, first-hand, the critical social and economic impact of wallets (like M-PESA, Nequi and bKash) in serving underserved communities.

As wallets are becoming increasingly sophisticated with user experiences that range from multi-currency capabilities, personal financial services, cross-border remittances, domestic acceptance and rewards models embedded in the real-time payment experience, there is a big opportunity waiting to be tapped — one that will reshape the entire ecosystem.