Report: Digital wallets to overtake debit cards in stores

Digital wallet use in the U.S. is projected to overtake debit cards in transaction value for in-store payments by 2027, according to a report from merchant payments processor Worldpay. 

Worldpay projects the debit percentage of point-of-sale transaction value will drop to 23% in 2027 from 28% last year, while the percentage point use of digital wallets is expected to more than double to 31% by 2027, from 15% last year. 

The report also projected a decline in the percentage of POS transaction value for credit cards, from 41% in 2023 to 34% in 2027. That would almost tie it with digital wallets for share of POS transaction value. 

Despite the projected shifts away from physical card usage for in-store purchases, U.S. consumers aren’t likely to turn away from credit or debit cards wholesale because they’ll still be tied to digital wallets, according to the report. 

“In card-dominated markets, card spend is simply shifting to digital wallets like Apple Pay, Google Pay and PayPal,” the report said. “Viewed in total, card transaction values are at an all-time high and continue to rise,” the report said. 

The shift that is occurring, both in the U.S. and abroad, is away from cash to other payment types, Worldpay Head of Global Enterprise Gabriel de Montessus said in a news release. “It’s important to understand that digital wallets are merely a mechanism for transmitting a payment,” he said. 

Digital wallets already accounted for 37% of U.S. e-commerce transaction value in 2023, putting them ahead of credit cards and debit cards at 32% and 19%, according to the report. Worldpay projects further dominance of digital wallets in e-commerce by 2027, with digital wallets increasing their share of transaction value to 52%, and credit and debit cards falling to 22% and 12%, respectively. 

Globally, digital wallets already secured the top spot for share of POS transaction value, the report said. Wallets accounted for 30% of POS spending last year, compared to credit and debit cards at 27% and 23%, respectively. And by 2027, wallets are projected to account for 46% of that spending, about $19.6 trillion, more than credit and debit cards combined.