As revenues grow, sports are an area where digital payments could look to consolidate its strength, driven by increased global usage of apps and contactless transactions within venues and stadia.
GlobalData’s latest report, ‘Digital Payments in Sport – Thematic Intelligence’ reveals that by 2028, it’s expected that only 9% of payments made globally will be in cash. The global digital payments industry was valued at $88.1 billion in 2021 and is forecast to grow at a compound annual growth rate (CAGR) of more than 20% through 2030.
The report recaps the global digital payments industry’s meteoric growth in the last two decades, thanks to evolving technology and the rise of the Internet as well as the ever-increasing use and reliance on smartphones. Technology companies and consumers both have a common goal in terms of improving efficiency and increasing flexibility options, and digital payments is one such area that will continue to benefit in the coming years.
Tanveer Aujla, Analyst at GlobalData, said: “The idea of paying in cash is a dying art, due to the ease and convenience with which people can carry out digital payments on their smartphones. The number of smartphones in regular usage around the globe is staggering in comparison to the same number a couple of decades ago. Where before buying things almost always required a presence at a physical store, people now have the ability to order almost anything they want online and pay quickly through a variety of flexible options.”
These developments have also found their way into sporting events, with NBA arenas beginning to incorporate the ability to order food through a phone app. This saw particular success at the home of the Milwaukee Bucks following the pandemic, when returning fans were still concerned about COVID-19 and the hazards of queuing near others.
Aujla continued: “There is an added convenience in being able to order from your seat and not having to miss any of the action at a sporting event. Additionally, the variety of payment options when paying digitally is far greater than when you pay in cash, with the ability to use digital platforms such as PayPal, Google Pay and Venmo.”
If digital payment brands are to continue entrenching themselves in the world of sports, then sponsorship is a viable option. As an example, PayPal currently has three active sponsorship agreements that totals to an estimated annual spend of $6.5 million a year, according to GlobalData. Sponsorship is an area where these platforms can reap the benefits of the increased visibility that comes through sports viewership.
Aujla added: “In the grand scheme of things, digital payment companies are still somewhat new in a sense, so it makes sense that the industry’s presence in sponsorship is in its infancy. However, it is expected to change in the next decade or so, as profits increase, and companies have more money to spend on these types of partnerships.”