The past three years have reinforced the clear notion that the human mind is as adaptable as it is sceptical.

It may be a commonly held view that ‘leopards do not change their spots’ and that many people are creatures of habit, especially in highly developed, stable Western societies, however, the past three years have been a period of rapid change and the technological developments that have ensued have largely been embraced rather than rejected.

One of the most noticeable changes that has taken place since 2020 is the rapid and widespread move toward the obsolescence of paper money.

Of course, cold hard cash is no more obsolete now than it was before the internet was invented; anyone, anywhere, can still go to the ATM machine, withdraw cash and use it almost anywhere to buy almost anything however, the behaviour of consumers and retailers has changed to the extent that out of choice, the majority of shops and their customers are now using digital wallets and contactless electronic payment systems.

According to the World Bank, between the beginning of the period in which many nations enforced lockdowns in March 2020 and the end of 2021, more than 40% of adults who made purchases using a card, phone, or the internet either on the internet or in a store did so for the first time.

The same applies to more than a third of adults in regions of the world with developing economies who paid utility bills from their bank accounts. In India, over 80 million adults made their first digital merchant payment after March 2020, while in China, a remarkable 100 million adults did so.

These are astonishing figures and show the revolutionary movement toward digital wallet usage globally.

During 2021, most governments in Western countries stopped locking their populations down after contention from the populations, and freedom was restored, but the voluntary move away from cash continued, meaning that the mindset of most people had shifted toward voluntary adoption of electronic payments.

What are the five major drivers of digital wallet growth?

1. You cannot buy from an app and pay with cash

When smartphone apps for buying items online or ordering deliveries to a home or business address were first invented, it was often possible to select an option to either pay via the app or pay in cash when the item is delivered. Those days are long gone.

Smartphone apps for buying products, ordering groceries, making travel plans or takeaway food are now multi-functional and feature Amazon-style ‘shopping baskets’ where various products can be ordered from one application and paid for at the end of the shopping experience.

Apps of this nature are now in widespread use for hotel and flight booking, food ordering, household goods and family consumer durables purchasing, and even making weekly grocery purchases via supermarket delivery services.

As so many items are now purchasable from one app, payment via the app is necessary to complete an order. When was the last time you used an app to buy something? It was probably less than a day ago!

2. Everyone wants an easy life

Back in the pre-smartphone era, one of the most irritating daily foibles would have been that disorganized shopper standing at a checkout in a supermarket or retail store fumbling in a handbag or rifling through jacket pockets whilst paper tickets and receipts fall around, looking for a wallet to pay for items with cash. The utterance of “I know it’s here somewhere” followed by rustling and mumbling whilst a line of customers rolling their eyes forms, is now a thing of the past.

Everyone wants an easier life, including that person who would have stood at the checkout fumbling and holding up the flow of customers in those long since passed, analogue days.

Today, a quick tap of a card, smartphone, or watch, followed by an accepting ‘beep’, has replaced the misplaced roll of notes, and instead of standing there attracting the disapproval of other shoppers, away goes the customer in just a few seconds.

In the Western world, the average use time per day of a mobile device is an astonishing 6 hours.

We are all so absorbed in the content on the internet, which is distributed via smartphones, that the digital wallet integrated into them is almost an extension of our own brain.

Beep… whirr.

3. Retail giants view smartphone digital wallets as central to their business model

Marketing departments within most companies which sell their products online to a wide audience understand that to buy online, they need to be able to integrate their checkout experience into digital wallets that operate on smartphone platforms.

This is a very straightforward and obvious point. Internet e-commerce giants such as Amazon, Wish, Alibaba, and eBay have direct integrations into smartphone wallets. One quick click and the Apple Pay or Google Wallet service is accessed, charged, and your product is on its way to you.

This level of user-friendliness has been welcomed and is now ubiquitous.

Interestingly, it is not new. eBay and PayPal were once the same company, way back in 2002, way before any sort of mobile device-based shopping experience even existed. It just took a trend such as the online shopping craze in 2020 to suddenly drive it toward mass adoption in every area of e-commerce.

4. Whereas there were once lots of cards, now there is just one device

Digital payment facilities are not new. People have been putting a credit or debit card into a card reader for decades, and contactless payments by using a physical card are likely to be something that most teenagers have seen all their lives so far.

However, there was a time when people carried a wallet with their various cards in it, including debit cards, credit cards, loyalty cards for discounts in supermarkets, fuel cards for paying for fuel for the car, store cards, and public transport payment cards (such as Oyster in London).

Yes, tapping each one on the relevant terminal was relatively simple, but carrying a plethora of cards in a bloated wallet was necessary.

Modern e-wallets on today’s smartphones are often able to contain the account details of all of these items, meaning that loyalty cards, payment cards, transport cards, discounts and store cards, are all on one device, negating any need for a large wallet and the consequent rummaging to find the right card, or even more annoying potential circumstance in which one falls out or breaks.

Having every account which interacts with every area of daily life on one device lightens the load and makes everything much easier.

5. With all this convenience, the infrastructure is growing exponentially.

Due to the endless list of apps and user-orientated systems mentioned in the first four items here, the infrastructure which facilitates the use of e-wallets keeps growing.

As a result of the continual expansion of infrastructure to support the easy use of digital wallets, just in the United Kingdom alone, 57% more transactions were made via contactless point-of-sale devices (consisting of contactless cards and mobile e-wallets) in 2021 than in 2020, that is an astonishing increase in usage, and it was all organic, with no institution or government forcing anyone to adopt the use of digital payments.

It is clear that anyone selling any service or goods, whether a large corporation or small retailer, understands that absolutely everything is being done via apps these days, and you cannot transmit paper cash via an app, so the e-wallet infrastructure is being invested in by national governments and the private commercial sector alike.

We live in a digital age, and in proving over the past three years that humans are not so averse to change as many demographers have opined, we are a digital universe in our method of going about everyday life and buying our daily goods.

Monevium is the Trading Name of Advanced Wallet Solutions Limited, a company registered in the UK under company number 10251711 and is regulated by the UK’s Financial Conduct Authority under Firm Reference Number 766038.