Cash: from the Most Popular Payment Method to the Least-used One

A study conducted by Capital On Tap on the global digital payment market indicates that as early as in 2022, cash payment will become the world's least used mode of payment.

The study also found that the increasing popularity of E-wallets, the improvement of service quality, the growing demand for smartphones, and the development of 5G and payment service providers are key factors for the rapid growth of the digital payment industry.

In addition, the global spread of the covid-19 epidemic has also accelerated the development of digital payments. Many consumers are now trying to avoid cash transactions, and instead use contactless payments as much as possible to ensure their own safety.

In terms of payment methods, debit card is the most popular payment method around the world in 2020, and its leading position will be maintained in the following years. However, cash (currently the second most common payment method) will be replaced by digital wallets.

In 2022, cash will be the least commonly used payment method in the global market. It also means that the cashless economy may arrive earlier than previously predicted.

In addition, the study also shows that the current total daily active users of mobile payment apps around the world are close to 1 billion, accounting for 12% of the global population, and the number will exceed 1.3 billion in the next three years. In China, the registered users of two leading payment apps, AliPay and WeChat, have exceeded 1 billion respectively.

According to calculations, currently 47% of smartphone users in China frequently use digital wallet apps, which makes China the country with the highest penetration rate of mobile payment in the world. In contrast, the business model of PayPal, one of the earliest digital wallet companies, is slightly different. Unlike most mobile payment apps, transactions on PayPal are not limited to conduct on mobile devices.

Despite the increasingly fierce competition in the digital payment market, the number of PayPal users continues to grow yearly. The study shows that the number of Paypal users has increased fourfold in the past 10 years, and its total number of users in 2020 will exceed 325 million.