The world of the Digital and Mobile Payments.

Mobile payments are in people’s everyday lives. You can find it in ApplePay, AliPay from Alibaba, WeChat Pay and Tencent (in China), Paypal, Venmo, Braintree, Square and also, now Amazon (who would have thought right). Today’s blog is an intro of what I will talk in my Wednesday presentation. Rather than having to bore you with six minutes of stats, numbers, math, revenues and growth rates, I will try to explain the importance of these numbers, the growth and the relevance in the digital economy and today’s Digital business.

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Digital Payments

  • Online processed payment transactions
  • Mobile payments processed via smart devices at point-of-sale (ApplePay in Whole Foods)
  • Cross-border peer-to-peer payments (Sending money from the US to Mexico with Xoom (from Paypal)
  • Digital consumer commerce transactions (e.g., credit card, online payment providers, etc.)


  • Transaction Value: U$2,7 Tn in 2017.
  • Growth Rate CAGR 2017-2021: 14.8% or US$865 Bn in 2021. (Almost 4 times 2017)

Market Definition (as seen in Statista):

The “Digital Payments” market segment is led by consumer transactions and includes payments for products and services which are made over the Internet, mobile payments at Point-of-Sale (POS) via smartphone applications as well as cross-border Peer-to-Peer transfers between private users. The following are not included in this segment: transactions between businesses (Business-to-Business payments), bank transfers initiated online (that are not in connection with products and services purchased online, like Amazon or eCommerce), and payment transactions at the Point-of-Sale where mobile card readers (terminals) are used.

The “Digital Payments” market segment is comprised of the following sub-segments:

Digital Commerce, Mobile payments, and P2P Money Transfers

Mobile Payments

  • Mobile Wallet Point-of-Sale payments processed on any kind of personal smart devices
  • Contactless, app-based transactions with a suitable payment terminal belonging to the merchant
  • NFC, QR-Code or Bluetooth-based payment transactions


  • Transaction Value: US$224 Bn in 2017.
  • Growth Rate CAGR 2017-2021: 11.5% or US$865 Bn in 2021. (Almost 4 times 2017)
  • Users: 663M by 2012
  • Average Transaction value: $622 in 2017 in 2017.

Market Definition (as seen in Statista):

The “Mobile Payments” segment includes transactions at Point-of-Sale that are processed via smartphone applications (so-called “mobile wallets”). Well-known providers of mobile wallets are ApplePay, Google Wallet, and Samsung Pay. Payments made via standard wireless NFC (Near Field Communication) or by scanning a QR code to initiate the payment. It triggers a bank account transfer or has a debit/credit card stored. The “Mobile wallet company,” Apple gets a piece of the pie.

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Payment instruments that are mostly used in North America are Cash, Debit Card, Credit Card as the top three. Most of the respondents in a survey from Statista use these instruments at least 60% of the time. But will soon decrease to 50% or even 45%. On the other hand, mobile payments, wallet apps, and apps used in retailers will grow from 12-13% to 22-23%, almost doubling by 2020. See below graph, which I found interesting, showing how all these “well-known” companies with digital wallets will soon move up the chain.

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When asked about U.S. consumer awareness and usage of mobile wallets, the clear winner was Paypal. Not only Paypal is the front-runner in the world of Digital Business and Payments, but also, they are the clear innovator in the space. With services like Venmo and Braintree (more on my presentation)

99% of consumers are aware of Paypal, on the other hand, Apple, Google, Amazon and Visa Checkout only 80-85%. When asked if they have used the service, Paypal usage was 76%, whereas Apple, Google, Amazon and Visa Checkout did not even get to 15%. Clear how Paypal was the first to market and the strongest after many years of success and even competing with Tech behemoths such as Apple or Google.

Interestingly, the same survey asked Millennials how do they pay in the past 3 months for goods or services and both Apple Pay and PayPal (through desktop) had 40%. It is known Apple Pay is growing at a 30-40% clip per quarter. Not only per users (1 Million new users sign up each week) but also, in transactions vs. last year (+450%).

The growth does not stop here. When asked how frequently user use wallet services, only 7% answered daily, 5% almost daily, 5% 2+ times per week and 57% have NEVER used Digital wallets. Could you believe this number? Probably every one of us uses ApplePay or other sort of Digital Payment once a week!

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Transactions are now U$49 Bn up from $27 Bn in 2016. Users are now 38 M, up from 23 M vs 2016, and spending per user has doubled to $1,300 annually vs. 2016. This is why Tim Cook from Apple says they have a Fortune 100 business within apple. ARTICLE.

New players have emerged in this new market. Naturally, in emerging markets, this payment will soon gain track, and it will gain at a much faster speed and growth as it had in the US (my opinion). In countries in Latin America or South East Asia, as well as China, there are tremendous amounts of cash in the streets, most people use debit cards or cash to go around. However, it is seen that it is going through a Digital Transformation and it requires a change in the consumer behavior. Still, 70% of Latin Americans don’t have a bank account, 60% of transactions made by SMEs are cash, and 47% of employees work in the informal economy. But this is soon to change, and the clips of growth are going to be enormous.

Lastly, the growth will happen in markets like China, where the middle-class population is growing, and almost 660 Million people have smartphones. Tencent and Alibaba are not staying behind, they are investing heavily in new apps, new P2P lending, and money transfer and imparting know-how to small start-ups in India, Indonesia or other SE Asia countries. I got this article from a fellow Grad student’s tweet, it is amazing to see where this growth is going to be in the next couple of years.

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Only two payment platforms, Alibaba and Tencent, handle 90% of China’s online payments by transaction value. They are seeking overseas growth and as an example finding it in Mexico, where Alibaba has started to ship and sell with AliExpress. A major competitor for Mercado Libre and Amazon in Latin America. See also in the same article, quoted above, the growth in India and Paytm.

So, my question to you is, do you use these services? How often? How do you think the future will come when paying a restaurant bill, or supermarket expenses?


  1. This is really interesting, Diego! It brings me back to a lot of the conversations we had around Tech Trek last year. How do you feel like companies like Starbucks will develop their apps moving forward? Does it makes sense to have their own apps? For Starbucks, they benefit greatly by linking mobile pay with gift cards, but will people keep using those if something like Apple Pay just requires a double tap?

  2. I definitely think the mobile payments is going to be a big deal. The problem is that everyone knows its going to be a big deal, so everybody is fighting over the market and it’s tough for any to get a hold in the non-China market. China can artificially lower the competition, allowing the major players to develop. Will be interesting to see if they can break out of China, though.

  3. Hilary_Gould · ·

    I just saw something when I logged onto my Venmo that you are going to start being able to pay for online shopping purchases using the app. Definitely crazy how these platforms are not only growing in popularity, but also in their capabilities so quickly!

  4. juliabrodigan · ·

    Mobile payment is an extremely convenient and useful tool. I use it everyday. My friends and I always talk about how we don’t remember what we did before we got Venmo – how did we split dinner or pay people back for something they bought for us. I think mobile payment has also drastically decreased the amount of cash people have on them. There is less of a need for cash because everyone uses cards and then pays people back using Venmo. That way once the person gets the Venmo payment, they can put the money back on their card.

  5. maririera19 · ·

    Mobile payments are definitely where the future is going. Since mobile payments’ introduction it has made carrying cash a nuisance and plugging or swiping a credit card a tedious task. I personally see mobile payments being the next credit cards. I am excited for your presentation to learn where you see this industry going and who will be its biggest players.

  6. fernanfu89 · ·

    Really interesting article! It is interesting to see who will succeed in this mobile landscape. What I find most mindblowing is that despite the technology being out there and most of the people having a smartphone or apple watch to do the transaction, most if not all use credit cards. I guess people use them because they know 100% it will be accepted. What I find more interesting is that more people are aware of paypal yet more probably would use applepay.

  7. m_thompson19 · ·

    Something that I’ve found is super cool is how even apps that penetrate global markets integrate payments (with currency exchanges and all of the complications.) A company that stands out to me as being incredibly successful at this is Airbnb – they even have an entire subsection of their company, Airbnb Payments, to facilitate this process. One could argue the ease of payments has a lot to do with Airbnb’s success. Here’s a pretty decent article on it:

  8. Danni Bianco · ·

    Great article! I really liked the way you broke down so much information into different categories and highlights. A great way to make those stand out/even easier to understand is by changing the font size/boldness for your headers!

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