Disintermediating Traditional Banking

Digital <br> Wallets
By: Maximilian Friedrich, Andrew Kim

Having onboarded billions of consumers and millions of merchants, digital wallets could transform the economics associated with traditional payment transactions, saving them nearly $50 billion in costs.

With 3.2 billion users, digital wallets have penetrated 40% of the global population. ARK research suggests that the number of digital wallet users will increase 8% at an annual rate, penetrating 65% of the global population by 2030.

As consumers and merchants adopt digital wallets, the usage of traditional checking accounts, credit and debit cards, and direct merchant accounts should decline, disrupting traditional payment intermediaries.

Cutting out middlemen, digital wallets could facilitate closed-loop transactions for more than 50% of their payment volumes, potentially adding $450 billion to the current $1 trillion in digital wallet enterprise value by 2030.


Sources: ARK Investment Management LLC, 2023. Forecasts are inherently limited and cannot be relied upon. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Past performance is not indicative of future results.

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