• Sara Cerutti, Global Head of Marketing at STICPAY


• 27.06.2023 11:30 am
#ewallets

In just three years’ time over 5.2 billion people, or 60% of the world’s population, will be using digital wallets – a 53% increase from 2022. 

From remittance services to cryptocurrency investment, digital wallets (or e-wallets) are affording consumers and businesses around the world new ways to store and transfer funds. But it is in developing nations, those countries that are a traditionally considered “cash heavy”, that the uptake of digital wallets will be felt the most, with 75% of the Filipino, Thai and Vietnamese populations set to adopt digital wallets over the next four years.

The surge in digital wallet popularity within emerging markets isn’t simply a South-East Asia trend, either. We at STICPAY are seeing digital wallet transactions skyrocket in other developing regions, such as across Africa: in the last quarter alone, STICPAY e-wallet transactions in Nigeria are up 2600%, while transactions in Kenya are up 1200%, for example.

To many of us in the West, digital wallets offer something of the convenience factor – they enable us to pay for our morning coffee more efficiently, or to transfer money to friends or family more simply, for example. Ultimately, financial technology such as e-wallets has served to make transactions that we were already undertaking more convenient.

In the developing world, however, where cash reliance is high, financial institutions and legacy infrastructure is inefficient and dated, and huge parts of the population are unbanked (1.7 billion people in total), e-wallets represent much more than speed and convenience. They represent an opening into the global economy, and with that entry point comes financial opportunity and hope.

Take the Indian expat in Kenya, who every time they wish to send money home, must do so via international bank wire that is both costly and slow. Thanks to e-wallet technology, now he can do so via a local banking system that removes the need for an intermediary bank, saving three days of processing time and high transfer fees.

Or the Nigerian merchant who, until today, has had little choice but to trade locally, in naira. Thanks to e-wallet technology, she can now accept cross-border digital payments in hundreds of different currencies, thereby unlocking new international revenue streams.

Of course, e-wallets cannot carry the responsibility of transforming developing economies alone. Rather, they are part of a wider picture – a picture that features many new forms of financial technology, such as cryptocurrencies, automated KYC checks and open banking – all of which are democratising access to finance. But by reducing dependency on central financial institutions and fostering a new culture of peer-to-peer transactions, e-wallets can play a leading role in developing financial inclusion around the world. 

It is vital, therefore, that e-wallet providers ensure that their technology remains open to all. How? By making it accessible, simplifying the payment process and implementing low transfer fees. Doing so will ensure greater inclusivity and development for those 1.7 billion underserved who, for too long, have been without a financial voice.