A trillion is an astronomical figure, especially if you look at some of the world’s top companies and their size; it gives an eye-opening context to how big $18tn is. If you combined the market caps of NVIDIA, Apple, and Microsoft, you wouldn’t even reach half of this number.
Digital payments are the future, but you could argue they’re also the present. If you’re a bit long in the tooth, you’ll remember the days before the Internet when people would use cash and cheques, the latter of which are almost obsolete in modern finance.
Digital payment systems have been revolutionising the way we perform our daily finances for two decades now, and as companies like Apple, Visa, PayPal, and traditional banks all begin to consolidate at the top of this industry, offering a market to literally billions of people all over the world, it starts to become clear why this industry will be worth so much money in the not too distant future.
However, with it projected to reach such an astronomical figure, let’s have a look and dissect some of the factors that are fueling the growth of this market, and whether it can completely take over how we make transactions, and whether it will leave traditional payment methods in its wake.
Revolutionising the way we pay
For something to emerge as a multitrillion-dollar industry over the space of a couple of decades, not only does it have to provide a genuine alternative to what’s already on offer, but it needs to show that it can surpass it.
As early as the late 1990s, it became abundantly clear that using the Internet as a global marketplace and facility for entertainment would soon become the norm – digital payment companies and burgeoning fintech were scrambling for inroads into this emerging new market.
The digital casino industry was one of the first industries to show just how much potential there was for digital payment technology.
Although early pioneers in digital commerce, such as eBay, were making astounding advances in digital payments, most notably through their pioneering and now well-established partnership with PayPal, the online casino industry started making the first significant advances in building a bridge between mass adoption and broader use cases.
Payment methods have become such a big part of the online casino industry that there are now highly-rated expert review sites like BetKiwi that rank the best casinos based on which payment methods they excel in, and how they rank against the other top gambling platforms that are also looking to use payment method speed and convenience as their unique selling point.
Of course, this is just the tip of the iceberg when we’re looking at a market that’s worth more than $18 trillion.
Mobile devices – the real driving force?
The global digital payment market showed early promise when the internet first emerged. However, the explosive rise in smartphones and mobile devices from the late 2000s onwards is when the industry truly gained traction, and as more of us began to use smartphones for large portions of our day, digital finance companies made it their mission to find the most convenient way for us to use their services.
Sure, using our credit cards online to buy products and services was a much more convenient alternative to land-based shops. However, smartphone technology evolving to the point where we could use digital payments on our phones and not have to worry about carrying around a wallet full of cards and remembering PINs was yet another revelation.
As the tech news seems to focus on AI, it’s crucial to point out that equal levels of innovation are taking place in fintech. Cryptocurrency and blockchain companies are leading the way in digital payment solutions, creating a market that removes any requirement for a bank to oversee a payment.
It’s a concept that would’ve been unfathomable 25 years ago, and it could be the next big frontier in digital payment services.
With some of the world’s most prominent asset management companies now eyeing up the sector for their investment strategies and bigging up Bitcoin, they’re injecting trillions of dollars’ worth of potential into the market and enhancing how we interact with digital payment options – all through the medium of our handheld devices.
Final thoughts
It shouldn’t surprise many that the global digital payment market is now at the forefront of a new digital finance revolution.
Apple and Google Pay combined have billions of customers, and this number is set to expand substantially over the next few years as the number of people who use the traditional payment market phase out of the market and are replaced by those who have grown up with the technology.
While some in Gen Z are going against the grain and opting for dumbphones in a bid to combat our world’s ubiquitous digitalisation, it’s likely a fad that won’t last. There’s so much interconnectivity and essential use that goes through our smartphones that it’s ultimately becoming counterproductive to try and go against the grain. Good luck to them, though.