As the world moves towards a cashless reality, growth bells ring for global mobile wallets market which is set to see an impressive growth from USD 675 bn in 2015 to USD 1602.4 bn by the end of the forecast period (2018).
The ease of use and the fact that mobile wallets obliterate the need of carrying money, reducing chances of losing currency or theft, is one of the major reasons of the market driven forward. But, these are not just use by individuals.
Financial institutions, multinational organizations, and merchants/retailers also use wallets for payments. In fact, retailers are projected to hold a 46.6% of share by the end of the assessment period as mobile wallets act as new channel of connecting with consumers. These remove the necessity of being physically present for the transaction to take place. Therefore, accessibility works for both individuals and businesses using the feature.
A Consolidated Market in a Dynamic Vendor Landscape
As per a Transparency Market Research study report, about 70% of the market share was held by top 3 players – ISIS (Softcard), PayPal Holdings Inc. and Google Wallet – in 2012. Other key players in the global mobile wallets market include Visa Inc., Square Inc., Microsoft Corporation Inc., Merchant Customer Exchange, MasterCard Worldwide, eBay, and American Express Co.
Entry of new players is predicted, making the market less consolidated over the forecast period. This will also make the playfield more competitive for established players. As per the report, players would enter into collaborations in order to attain standardization of products and allowing interoperability between wallets.
Rise in Mobile Banking to Underpin Growth of the Global Mobile Wallet Market
More and more people across the globe are adopting mobile banking and with mobile wallets taking the ease of making transactions even smoother, they are bound to see rapid growth. High rate of adoption is expected in developing economies such as India, creating untapped opportunities in these regions. As governments in these countries, direct earnest efforts in bringing more people into the formal banking fold and encourage digital transformation, more growth is expected. One of the trends that is swiftly catching up with people is the use of NFC (near field communication). This can be used with debit or credit cards stored in digital format as well as wallets and platforms like Google Pay.
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Worldwide, there are 1.3 billion debit and credit accounts that are currently active and about 5.3 billion people using mobile banking. This is a large number of potential consumers that can be tapped into to help global mobile wallets market growth. Merchants should take note and build up a strategy to make the most of this situation. Creating awareness is one that could come handy.
Data Security Concerns Restrict Market from Reaching Full Potential
Cyber security threats and privacy concerns regarding use of mobile wallets is one of the concerns hindering growth. Then, there is also the fear of losing one’s phone. To allay these fears, both mobile companies as well as the governments are coming up with measures. Product testing includes hackers trying to break through phone’s security checks while the governments across the globe are working towards creating the overall digital environment more secure. As these concerns get addressed, the market would spur into further growth.
The study presented here is based on a report by Transparency Market Research (TMR) titled ‘Mobile Wallet Market (Industry Participant – MNOs, Financial Institutions, Payment Network, Intermediaries (Payee Service Provider, Acquisition Service Provider, Issuer Processing Service Provider, and Payor Service Provider), Merchants/Retailers, and Customers; Component – Hardware, Software, and Services; Consumer – Online Shoppers, Card Users, and Cash Payers; Functionality – Single-Function, Multi-Function, and Universal-Function) – Global Industry Analysis, Size, Share, Growth, and Forecast 2012–2018’.