蘑菇AV

A rewards integration coming later this year could make Synchrony a more attractive co-brand partner

Major payment players like PayPal and Visa that invested in them are likely celebrating this regulatory movement

PayPal is the most popular mobile payment app that US adults typically use, with over twice as many users as the next most popular choice, Venmo, according to November 2024 data from YouGov.

Financial institutions (FIs) will burst through the financial media network (FMN) door first cracked open in 2024. Chase made headlines in April by announcing its new ad business, followed by PayPal in May. They鈥檙e the most high-profile FIs to do so yet, signaling that FMNs could be a meaningful new revenue stream for the financial services industry.

Gen Z is the first mobile payments-native generation. By 2028, 67.8% of US adults will be mobile wallet users, per our forecast. Gen Zers are already way ahead: 85.1% made an in-store or online payment using their phone in 2023, according to Federal Reserve Bank of Atlanta.

Fintechs, banks, and the government will reshuffle the payments deck in 2024. New features and competition will redefine the digital wallet user experience, and FedNow will pivot payment flows in new directions.

The Vipps wallet in Norway is the first to use Apple鈥檚 NFC tech, opening the floodgates for more to deploy the tech.

Dramatic shifts are in the works for 2024, as BaaS, social media players, genAI, and new digital wallets reshape the banking landscape. Our top trends explore what鈥檚 in store.

Consumers will use proximity payments more often as they adopt additional digital wallet features. Annual mobile proximity spend per user will grow at a 12.4% average annual rate from 2024 to 2028. Providers are equipping mobile wallets with a broadening array of features that give consumers more reasons to use鈥攁nd spend with鈥攖heir digital wallets.

And it could have pushed consumers to use an alternative digital wallet like Shop Pay or Cash App Pay to check out online. If consumers had a good experience with these other wallets, they may also be more willing to use them in the future, affecting PayPal鈥檚 future volume.

The digital wallet added Afterpay and will soon add Klarna. Google Pay already has tie-ups with Affirm and Zip. Expanded virtual cards. Google Pay will now let Discover cardholders in the US set up and pay with a virtual card from their Chrome or Android device. This feature was already available to American Express, Capital One, and Citi cardholders. Added fraud protections.

Our take: There has been a frenzy of feature innovation in digital wallets as they try to expand beyond payments into everyday commerce enablers. Adding new features like Pool Money is therefore crucial for PayPal to stay competitive and maintain customer loyalty in the highly saturated market. We expect PayPal to have 217.3 million core users worldwide in 2025.

Western Union has become the latest financial company to launch a media network, joining the likes of Chase and PayPal. 鈥淭he biggest advantage [financial media networks] have is just breadth. So, unlike a retail media network, they capture the entire spending history that a customer has,鈥� said our analyst Maria Elm on an episode of our Behind the Numbers podcast.

Digital wallet adoption. Digital wallets are powering the region鈥檚 digital economy. Consumers used digital wallets for more than half of online purchases in Latin America as of 2023, per an AMI report cited by Evertec. Pandemic-related digitization and improved internet access have supported wallet usage.

The company is shifting its strategies to achieve greater profitability, but investors still aren鈥檛 impressed

But despite being the first foreign credit card network to gain approval, Amex has fallen behind the other card networks in gaining partnerships with China鈥檚 major digital wallets. Alipay already partners with Visa, Mastercard, Discover, Diners Club International, and JCB.

蘑菇AV one in five (19%) of Gen Z consumers in the UK and 12.5% of UK millennials routinely turn to digital wallets for bill payments, per a July 2024 PYMNTS Intelligence survey. Other P2P payment providers have also been pushing innovation for this use case.

Mobile P2P payments are struggling to capture users in Canada. But banks and digital wallet providers can lean into their respective strengths to create a rosier outlook for growth.

Apple will soon open up its near-field communication (NFC) tech to third-party digital wallets in the US and will let iPhone users choose their default contactless payments app.