- The growth in "eWallets" has the payments mechanism poised to break through into mainstream use, Wells Fargo says - with no small amount of help from the COVID-19 pandemic.
- At about 22% of global point-of-sale, and 42% of e-commerce payments, eWallets are expected to account for 30% and 52% by 2023 - which translates to about $10 trillion in volume, Timothy Willi and team write.
- Underpinning that growth will be advancing technology, a changing regulatory landscape and a growing ecosystem of services "which drives adoption through an enhanced value proposition for both merchants and consumers."
- And it says that its coverage universe in FinTech and Payments are facilitators of that change and are well positioned to benefit.
- And those with most to gain from eWallet evolution have proprietary wallet apps of their own - Square (NYSE:SQ), PayPal (NASDAQ:PYPL) and Shopify (NYSE:SHOP) - that consumers will want to "carry" on phones and interact with daily.
- They'll be able to "leverage their merchant base to drive unique experiences and shopping incentives that should drive more consumer adoption, engagement and volume," Wells Fargo says; the companies will benefit from increased volumes they can monetize, but also leverage the growing base and drive volume to merchants that are payment processing customers.
- And a surprising winner it includes among that crowd is Euronet Worldwide (NASDAQ:EEFT), perhaps not fully appreciated by the market, but which could take advantage in several ways. First, it's a partner of choice as wallet providers build out their platforms. Ria, the money transfer business, could also be a part of third-party wallets, Wells Fargo says.
- And the agent network of Ria and those retailers that work with ePay could be a load network for consumers that want to add value to wallets.
- Other names that could benefit to a more indirect extent - through impact to their businesses - include Fidelity National Information Services (NYSE:FIS), Fiserv (NASDAQ:FISV), Global Payments (NYSE:GPN) and Jack Henry & Associates (NASDAQ:JKHY). They can connect wallet providers with various payment networks globally, and connect banks' consumers with the wallet platforms and even possibly help support proprietary wallets.
- And there might also be a role for Western Union (NYSE:WU) and Paymentus (NYSE:PAY) in the growth of eWallets. There's an opportunity for Western Union to strike agreements to become the default money transfer offering in third-party wallets - or even leverage its brand and customers into its own wallet.
- Meanwhile, Paymentus is currently rolling out its platform on PayPal to offer those users the ability to pay bills through PayPal's app, and "We would look for them to strike other deals with other wallets/platforms for similar services which will help drive volume growth."