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- Global digital payments revenue to surpass $3T by 2028
A new report has tipped the future of global payment to be digital, predicting a market capitalization of $3 trillion before the end of the decade.
A report by Research and Markets said global digital payments revenue will pass the $3 million mark by 2028. The projected growth indicates a compound annual growth rate (CAGR) of +10% due to several factors.
The report claims rising credit card usage led to the surge, contributing as much as 40% to the growth. The second biggest growth driver is expected to be digital wallets, underscored by rising adoption rates in developing economies with low financial inclusion levels.
Despite the top spot occupied by credit cards, digital wallets will record double-digit CAGR in the forecast period.
Instant payments have been tipped to contribute to 20% of all global transactions in 2028, nearly doubling its current levels. Alongside the spike in instant payments is the decline of cash use in several jurisdictions.
A key feature of the report is the increasing reliance on blockchain technology for payments. Digital asset-based payments are spiking on the retail side, with over 560 million users by the end of 2024.
The report predicts that retail users of Web3 payments will easily double their numbers before the end of 2028. Currently, users lean toward the offerings, citing lower fees, anonymity, and the potential for cross-border payment.
On the institutional side, financial institutions are exploring the concept of stablecoins for settlements while banking regulators are turning their gaze to central bank digital currencies (CBDCs).
Asia Pacific is tipped to contribute a chunk of the $3 trillion market capitalization, trumping the U.S. and the rest of North America. Per the report, the Asia Pacific region will provide as much as 50% of the projected revenue, with North America and Europe contributing their fair share.
Turning to AI technology to prevent industry fraud
Key industry players like Visa (NASDAQ: V), Mastercard (NASDAQ: MA), Apple (NASDAQ: AAPL), and Paypal (NASDAQ: PYPL) are turning toward artificial intelligence (AI) tools to prevent security breaches. Other traditional financial institutions employ AI tools to comply with anti-money laundering (AML) rules and spot discrepancies.
By 2028, Research and Markets predicts combining AI and Web3 for security standards will be mainstream in digital payments. Governments, like Nigeria’s anti-graft agency, are also looking to employ emerging technology to protect their financial ecosystems.
Latin America expected to triple its digital payments revenue by 2027
In other news, Latin America (LATAM) is set to record a triple growth in digital payments revenue by 2027, which Research and Markets said would be driven “by fintech innovation, financial inclusion, and e-commerce expansion.”
The region will see its digital payments market capitalization soar to $0.3 trillion by 2027, recording a double-digit compound annual growth rate (CAGR). The report says key consumer trends will shape the LATAM payment landscape over a two-year period.
The biggest growth driver for the region will be rising e-commerce adoption in the region. E-commerce metrics in LATAM are rising, and integration with new digital payment alternatives will increase ecosystem revenues.
Credit and debit cards are also predicted t