Global Statistics Representing Mobile Wallet Market Scenario
The conventional payment market is experiencing high-level technological transformation with the emergence of smart card, e-wallet, net banking, and others. Mobile payment technology is set to disrupt legacy business models, owing to new technological innovations such as integration of wearables, biometrics, and blockchain technology. For instance, in September 2018, Infinito Wallet launched the Universal wallet with Cardanol’s ADA cryptocurrency support. The technology is expected to pave way for fast and secure transfers through a smart contract platform, specifically for applications that consumers, businesses, and governments can rely on.
The global e-commerce boom is a primary factor expected to drive the mobile wallet market growth during the forecast period, 2019–2026. The e-commerce market is growing at a rapid pace on account of the increasing penetration of smartphones and the internet, which has compelled e-commerce companies to rely on strategic acquisitions and new product development to expand their market presence. In December 2017, Kroger Co., a Cincinnati-headquartered grocery chain, launched a new mobile payment option by teaming up with JPMorgan Chase & Co to offer mobile payment options with select retail markets and e-commerce programs in 2018.
As mentioned above, blockchain technology could revolutionize mobile wallet technology by mitigating the cybersecurity risk associated with digital transactions. Blockchain technology can provide a secure medium for identity verification and authentication of a user’s financial transaction. In blockchain technology, all transactions are time stamped, encrypted and tamper-proof, which largely reduces the issues of fraud and double spending. Currently, the average remittance charged by any financial intermediary (bank) for performing any financial transaction is about 7.5 to 10%. The adoption of blockchain would enable customers to have direct point-to-point transactions without a need for third-party interface, thereby reducing expensive transaction fees.
The global mobile wallet market was valued at USD 700 Billion in 2017 and is estimated to grow at a CAGR of 37% during the forecast period.
Mobile Wallet Market Segmentation
The global mobile wallet market can be segmented on the basis of wallet type, payment mode, and application.
Based on wallet type, the market can be segmented into device-centric, merchant-centric, network-centric and others. On the basis of payment mode, the market can be segmented into near field communication (NFC) and remote payment. Based on application, the market can be segmented into mobile commerce, mobile transfers, micropayments, and others.
North America is estimated to hold the largest share in the mobile wallet market, owing to rapid developments in mobile wallet technology, which have intensified competition among various companies in the U.S. with an intention to improve consumer convenience and lower payment costs. For instance, in 2010, AT&T and T-Mobile launched a near field communication-based mobile wallet with payment credentials secured through mobile network operators. In the same year, Stripe was launched, which reduced the time associated with accepting online card payments. In 2016, Google upgraded its wallet for person-to-person purposes, and Android Pay was launched. At the same time, bank-centric wallets such as Capital One, Chase Pay, and others were also launched.
The Point of Sale (POS) environment is changing rapidly in Canada, owing to the increased usage of tablets and mobile devices for payments in e-commerce. These devices have enabled the creation of a secure channel to conduct financial transactions. In 2016, Payments Canada enhanced its framework to allow mobile payments through POS by introducing the process of tokenization, which replaces customers’ banking credentials with proxy credentials, thereby introducing privacy in customer transaction. Additionally, the integration of high-level authentication methods such as biometrics for the protection of banking credentials is also projected to fuel the demand for mobile wallets in Canada.
PayPal, one of the global players in the e-wallet market, has expanded in Europe by integrating with many e-commerce platforms. It has also recently rolled out its mobile app to offer a better user experience. Additionally, other companies that are expanding in Europe include Apple, Samsung, Alipa, and others. Alipay has recently acquired the support of more than 900,000 merchants in Europe for supporting Asian communities and travelers abroad.
The emergence of new players in the mobile wallets market, such as Yoga Wallet and Pay by Bank App in the U.K., has also intensified competition. Pay by Bank App was developed by four of the biggest banks in the U.K., namely Bank of Scotland, Barclays, Halifax, and Lloyds Bank and offers a secure and trusted solution to customers. On the other hand, Yoga wallet adopts a competitive strategy to indulge incorporated player and their beneficial schemes into their application, thereby expanding its consumer base. The Yoga wallet application has received an investment of about USD 15 Million from the retail company, Metro Group, which would be used for its expansion.
Some of the key players operating in the market include American Express, Apple Inc., Google Inc., Blackberry Ltd., Sprint Corporation, MasterCard Incorporated, AT&T INC, Samsung Electronics Co., Ltd, and Visa Inc.
Mobile Wallet Market Segmentation
By Wallet Type
By Payment Mode
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In October 2018, the Reserve Bank of India laid out several guidelines that would allow payments between different mobile wallets, which is expected to bolster the mobile wallet market growth during the forecast period. Digital payments have witnessed an upsurge in the country post the demonetization period and are expected to grow to about USD 1 Trillion by 2023