Where can you find the most value for your hard-earned money? Informed people everywhere seek the best consumer product purchase options via their mobile device and buy what they need with the expectation of reliable and fast delivery.
This trend forces legacy retailers to shift their strategies and increase their digital presence and product availability. Moreover, the ongoing COVID-19 pandemic has negatively impacted the omni-channel retail laggards.
Most retailers feel under pressure to offer streamlined shopping experiences and support omni-channel payments. The line between physical and digital commerce is becoming increasingly blurred. These key trends are truly transformational.
Omnichannel Mobile Payments Market Development
It's now forecast that mCommerce payments will reach $3.1 trillion in 2025 -- that's up from $2.1 trillion in 2020, according to the latest worldwide market study by Juniper Research.
The analyst found that the pandemic’s massive boost to digital wallet services in the offline arena with OEM Pay has been a key driver of greater mCommerce usage -- accelerating the already rapid transition from offline to online services.
The new market study uncovered that the two single largest eCommerce markets -- China and the U.S. -- will see volume growth in smartphone payments for remote goods of 55 percent and 74 percent respectively, between 2020 and 2025.
The new market study uncovered that the two single largest eCommerce markets -- China and the U.S. -- will see volume growth in smartphone payments for remote goods of 55 percent and 74 percent respectively, between 2020 and 2025.
In China, eWallet payments are well established, with eCommerce continuing to grow, as availability and prosperity rise. In the U.S. market, OEM Pay wallets and PayPal will be the major beneficiaries of a permanent pandemic-driven shift to online shopping.
Juniper analysts recommend that payment processors prioritize digital payments acceptance for the most popular wallets in target countries at both the online and offline point of sale, or risk missing out on this huge upside opportunity.
Juniper Research anticipates that this uptick in mCommerce transactions will translate into the rapid growth of new payment models, such as Buy Now, Pay Later (BNPL) omnichannel retailer solutions.
Juniper Research anticipates that this uptick in mCommerce transactions will translate into the rapid growth of new payment models, such as Buy Now, Pay Later (BNPL) omnichannel retailer solutions.
Deploying BNPL via APIs in checkout processes will mean a significant shift away from traditional fee- and APR-based credit card models of consumer financing for online purchases, particularly amongst millennials less convinced of the benefits of credit card ownership.
According to the Juniper assessment, BNPL also offers significant advantages to retail merchants as a way to increase average basket size, while improving and boosting the user experience for shoppers.
Outlook for Mobile Payments Applications Growth
"It is critical for payment processors to prioritize building technological ecosystems to allow the acceptance of BNPL across all payment methods, or they will be left behind by more digitally-adept providers," said Susannah Hampton, an analyst for Juniper Research.
OEM Pay, where payments are made by a smartphone manufacturer-backed wallet -- such as Apple Pay, Google Pay, and Samsung Pay -- will see a surge in use with volumes for remote physical and digital goods anticipated to grow globally by 730 percent between 2020 and 2025.
I anticipate that banks and other legacy financial institutions will continue to monitor the OEM fintech sector closely since it's likely to be a primary source of disruption for the traditional debit and credit card industry. Mobile payment apps that include digital wallet features will transform financial services. That's why I'll continue to monitor these trends and report on the latest market research findings.