**Philip Benton**, Principal Analyst - Financial Services
High mobile penetration and emerging digital-only banks is increasing financial inclusion rapidly and forecast to reach 67% by 2026, boosted by rising debit card ownership.
Whilst a cash-dominated market at point-of-sale, digital payment acceptance is growing quickly with debit card volume transactions CAGR forecast of 13% by 2026.
PIX, a new real-time payments network, has accelerated the shift to digital payments. Also, the popularity of neobanks is contributing to strong growth in debit card usage.
The first digital banking licenses were issued in 2020, prompting wider adoption of digital wallets and accelerating payment card penetration.to 49% by 2026, up from 43% in 2022.
Digital-first payments - Growth of digital commerce (online and mobile) has driven consumer demand for more convenient digital-first payment methods. Increasingly seeing card-based digital payments being used in-store as default.
Cashless society initiatives - There are several national (and international) initiatives to increase bank account penetration by striving for a cashless society that embraces digital payments.
Digital wallets/super apps - Digital wallets/super apps typically leverage the card payment rails and are incentivizing consumers to move away from cash and embrace digital payments.
Digital ID for onboarding - Identity checks typically took place in a physical branch but increasingly governments are embracing digital documents for identify checks enabling fasting onboarding and increase in financial inclusion.
Smartphone ownership boosts credit card opportunities - Credit card penetration has typically been low in emerging markets where access to credit scoring data is low. Increased smartphone ownership has greatly enhanced available credit-scoring data enabling more citizens to successfully apply for credit cards.
Real-time payment adoption - Whilst the growing enthusiasm for real-time payments boosts digital payments, it potentially could take share from card payments with real-time rails being faster to settle. PIX in Brazil operates entirely removed from card schemes and surpassed 1 billion transactions in its first 6 months.
Philip Benton Principal Analyst, Financial Services philip.benton@omdia.com