In the race to digital wallets, don't forget cash

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In the race to digital wallets, don't forget cash
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Success in the digital payment space will hinge on the ability of new players and incumbents to converge the physical and digital experience into a seamless continuum for the customer.

Bank of America predicts that by 2026, digital wallets will be used by more than 5,3-billion people, which is more than 50% of the world’s population. In Africa, the local e-payments market is likely to see revenues gain by around 20% percent a year, according to McKinsey. This means that the market will be worth about $40-billion by 2025. By comparison, the global market is expected to grow at 7% a year over the same time.

The transition happened organically because trust was built over time on the ability to move and store cash seamlessly, making life easier for cash-based customers. McKinsey calls this Wallet 2.0 and points out that there is now a move to Wallet 3.0, which is an offering that adds in-app shopping. The International Monetary Fund says that the informal economy is a large part of most economies in sub-Saharan Africa. This sector accounts for between 25% and 65% of GDP, and between 30% and 90% percent of all non-agricultural employment.

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