Greater Mobile Wallet Use to Send Cash Registers Ringing
Juniper Research, a leading analyst company specializing in fintech and digital commerce, in a report of its study titled “Mobile Wallets: Service Provider Analysis, Market Opportunities and Forecasts” predicts that global spending through mobile wallets would increase by almost 32% in 2017 to touch $1.35 trillion.
Juniper Research has also released a complementary white paper called “War of the Wallets.”
The following are some of the developments in the global mobile wallet marketplace the previous year:
- Online payments for physical goods accounted for 43% of the total global transaction value, followed by domestic money transfer accounting for 39%. NFC retail payments account for only 5%, but the study predicts that it will increase to 12% by 2021.
- Many new high-profile mobile payment services have emerged, including Android Pay, Apple Pay and Samsung Pay.
- Many MNO (Mobile Network Operator)-led ventures have failed. The study predicts that MNOs are unlikely to get more traction outside emerging markets, because according to Dr Windsor Holde, author of the research: “Network operators remain wedded to offline payments based on an NFC SIM card, at a time when more agile competitors are deploying integrated HCE wallets that also enable online usage.”
- Accounts (or wallets) are integrating online as well as offline payments, thus allowing the use of wallets for instore as well as remote purchases.
- Apple Pay operated for the full calendar year in the US and has also launched its service in Canada, the UK and Australia.
- Samsung has introduced its own NFC payment service called Samsung Pay.
- Host Card Emulation (HCE), an on-device technology which allows a mobile phone to emulate a card on a device which has Near Field Communication (NFC) enabled, has significantly scaled up. Over 50 banks are engaged in commercial deployment of HCE.
- Google has relaunched its mobile wallet as “Android Pay”.
- Samsung, Apple and Google accounted for 74 million users by 2016-end.
- The Total Payment Value of PayPal through mobile devices touched $102.2 billion from 13 million merchants.
- China dominated 52% of the market in 2016, but this share would gradually reduce during the forecast period.
- Many regions would experience a CAGR of more than 30%.
- India’s share in the global market would increase from 8% in 2017 to 11% by 2021.
- The PSD2 (Payment Services Directive 2) legislation implemented in Europe, would increase competition in the European mobile wallet market, with existing vendors introducing additional services which add to their payment offerings.
The main vendors in this market were Alipay, Android Pay, Apple Wallet, Masterpass, Orange Cash, PayPal, Paytm, Samsung Pay, Visa Checkout, Vodafone M-PESA, Vodafone and Weixin (WeChat).
Alipay and WeChat did extremely well in 2016 in China and the Far East.
Major players like Apple and PayPal have introduced wallets which integrate instore and online payments. The study predicts that such integrated wallets would become the default payment mechanism in the future.
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