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Tuesday, January 31, 2017

Mobile Wallet Global Spend to Reach $1.35 Trillion

The major players in the smartphone ecosystem are driving growth with value-added services. The emergence of several high profile mobile payment service offerings has provided the sector with much needed new growth opportunities.

Apple, Samsung and Google have all expanded their mobile wallet range across the globe: by the end of 2016, the services were available in 13, 8 and 9 markets respectively.

Between the three vendors, they have rapidly scaled their active mobile wallet user base -- which had reached an estimated 74 million by the end of 2016.

Global spend via mobile wallets is expected to rise by nearly 32 percent in 2017 to $1.35 trillion, according to the latest worldwide market study by Juniper Research.


Mobile Wallet Market Development

The study found that spend is currently concentrated in the Far East & China, due primarily to the success of mobile services such as Alipay and WeChat.

However, Juniper analysts believe that moves by PayPal and Apple to offer mobile wallets which can be used both in-store and online means that this approach could increasingly become the default payment mechanism in other markets.

The research, which forms the a comprehensive assessment on the mobile wallet industry, highlighted PayPal’s decision to introduce a host card emulation solution, a form of near-field communication (NFC), to enable point of sale (POS) payments as a key disruptive moment in the wallet wars.

According to the Juniper assessment, this approach -- allied to the burgeoning success of its social payments subsidiary Venmo -- places PayPal in pole position to capitalize on the increased demand for mobile wallets.

Indeed, the research firm classified PayPal as the established leader within its Mobile Wallets Leaderboard, which provides a comparative assessment of wallet providers -- including Alipay, Apple, Mastercard, Paytm, Samsung and WeChat.

Outlook for Mobile Payment Service Growth

Additionally, the study findings determined that the implementation of the  Payment Services Directive 2 (PSD2) legislation should spur further competition within the European wallet space, with existing players poised to introduce additional services to complement their payment offerings.

However, according to the Junifer assessment, outside emerging markets the remaining mobile network operator wallet ventures were unlikely to gain traction.

"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," said  Dr Windsor Holden, head of consultancy and forecasting at Juniper Research.