Whitepaper - The Evolution of Digital and Mobile Wallets The Evolution of Digital and Mobile Wallets | Page 3

The Evolution of Digital and Mobile Wallets

August 2016

THE DIGITAL WALLET: INTRODUCTION
Commerce is going mobile. In 2014, smartphones became the dominant internet access tool
around the world, replacing desktop and laptop computers, and by 2020, there will be 2.6 billion
1
connected smartphones in the world. Metcalf’s law, the law that “the value of a
telecommunications network is proportional to the square of the number of connected users of
the system,” has never had a more powerful example than the growth of the smartphone. With
every new smartphone user, the potential for interconnectivity through chat apps such as
WeChat and social media such as Facebook and Snapchat increases exponentially, and it’s
changing the fabric of global society. Along with the social change enabled by mobile, commerce
is being impacted at the same pace. E-commerce is growing at a rate of 32% (Figure 1).
Figure 1: Global Online Commerce Forecast
Global Online Commerce, 2012 to e2020
(In US$ billions)

$139
$1,120
Digital goods

$130
$837
$120
$626
$97
$415
$68
$204

$52
$61
$624

$60
$133
$832

$1,136

2012

2013

2014

$83
$298
$1,588
e2015

Mobile retail
commerce

$109
$516

$5,855

E-commerce

$4,608
$3,633

$2,273

e2016

$2,870

e2017

e2018

e2019

e2020

Source: Aite Group analysis

A large part of this growth originates from mobile commerce. In North America and Europe
combined, online sales initiated by mobile devices grew by 58% between 2014 and 2015,
2
compared to just 3% for desktop-initiated commerce. In emerging markets, the importance of
mobile commerce is even higher, as the mobile network is the primary infrastructure for online
commerce.
While the growth of mobile online commerce has been rapid, use of a smartphone for purchases
at a physical point of sale (POS) is nascent, and the growth rate is much slower than that of
mobile online. This is logical, since the smartphone already “lives” in the virtual world. Its
1. “The Ericsson Mobility Report,” accessed April 27, 2016, http://www.ericsson.com/mobility-report.
2. Centre for Retail Research, accessed June 14, 2016
http://www.retailr