Global Statistics Representing Payment Processing Solution Market Scenario
Mobile payments are regulated transactions that take place digitally through mobile devices. Mobile payment is a secure, fast, and convenient payment mode. The technologies used in mobile payments include Near Field Communication (NFC), sound wave technology, Bluetooth, Wi-Fi, and a short-range transmission system. Mobile payment first became popular in Asia and Europe, before becoming more common in the U.S. and Canada. Because of its enhanced security and convenience, mobile payment adoption will continue to grow in the coming years.
The global mobile payment market is expected to grow at a CAGR of 29.3% during the forecast period, 2019–2026.
A significant rise in the number of new mobile subscribers has been witnessed in 2019. According to a GSMA report, the number of mobile connections is approx. 8.98 billion. In addition to this, the shift in consumer behavior towards online markets has increased the scope of the m-commerce industry globally. For instance, there were around half a billion mobile money accounts registered as of 2016, and of these, over 170 million were active, owing to a decrease in mobile data tariff and price inflation for internet services. Additionally, growth in the demand for smartphones, coupled with fast connectivity, may boost the mobile payment market in the coming years. According to BigCommerce Pty. Ltd., globally, mobile commerce sales will contribute around 54% to overall e-commerce sales by 2021. The influence of mobile devices in the purchase and sales of goods and services such as apparel, accessories, groceries, and health and cosmetic products and attractive deals such as special offers, cashback, and discount coupons are also pegged to contribute to the growth momentum.
Point of Sale to Register the Highest CAGR Among Segments by Type
The point of sale segment is expected to grow at the highest CAGR in the global mobile payment market during the forecast period. A survey conducted by Kount on Mobile Payments and Fraud in 2018 found that that 37% of merchants already supported mobile payments at the point of sale (via NFC, mobile web, mobile wallets, etc.) and 31.4% planned to add to this feature. Many companies are combining more than one technology to offer advanced mobile payment solutions; for instance, Samsung Pay uses Near Field Communication (NFC) and Magnetic Secure Transmission (MST) to pay at the point of sale.
In-store Payments to Hold a Relatively Large Market Share Among Different Types of Mobile Payment Solutions
According to Mobile Payments World, the number of in-store mobile payment users in the U.S. is expected to reach 150 million by the end of 2020, representing 56% of the U.S.’s total consumer population. In-store mobile payment refers to two payment methods – mobile wallet and QR code-based mobile payment. Google Pay and Samsung Pay, Alipay, and Wechat Pay are some of the leading players in the mobile wallet market.
Demand From Finance Sectors to Drive Growth of Remote Payment Segment
Remote payments are a popular topic in finance industries and given high priority by banks. Remote payment covers various aspects, including internet payment, SMS payment, direct carrier billing, mobile banking, and Wireless Application Protocol (WAP). Direct mobile billing is one of the remote payment methods of the past years; in this, customers can make payments or credit transfers via mobile phones through bank accounts.
Consumer Demand for Convenient Payment Methods is Compelling Businesses to Adopt Mobile Payment Solutions
By application, business users are projected to capture a significant market share in the global mobile payment market during the forecast period, 2019–2026. Many business verticals are rapidly adopting mobile payment applications such as Alipay, PayPal, Google Pay, and Apple Pay to accept payment, as consumers are demanding more convenient payment methods. Many business owners see potential in the mobile payment market and are, therefore, increasingly adopting mobile payment methods; for instance, across Starbucks’ total 1200 outlets in the U.S., 20% or more orders are completed through mobile order and payment.
Personal users are also expected to witness significant growth in the global mobile payment market during the forecast period. The proliferation of mobile phones worldwide has extended the use of mobile payment for money transaction purposes. A survey conducted by The Pew Charitable Trusts in 2016 found that more than 70% of mobile payment users are millennials.
Pervasiveness of 4G Connectivity Drives Market Growth in North America
North America is a large market for mobile payment solutions due to the pervasiveness of 4G connectivity, which gives customers hassle-free access to online services on their smartphones. The region is, thus, expected to witness an exponential growth rate in the coming years. InstaMed – a registered ISO of Wells Fargo Bank – recorded staggering adoption of mobile payment solutions for bill payment. In 2015, mobile payment accounted for approximately 20% of all consumer payments as compared to around 2% in 2011.
Growth of m-Commerce to Drive Growth of Europe’s Mobile Payment Market
Europe is expected to witness significant growth in the mobile payment market during the forecast period. M-commerce is growing steadily in the region, making its way in almost every business and industry, offering ease of payment to both customers and retailers. In 2017, around 77% of Europeans used mobile banking as well as mobile payments as compared to 29% in 2015. Additionally, the increasing distribution network of smartphone companies has made mobile payment an easy and convenient source of payments. In 2017, there were 465 million unique mobile subscribers in Europe, which is around 85% of the population, and the migration of these customers to 4G services is underway.
Growth of e-Commerce to Propel Demand for Mobile Payment Solutions in APAC
Asia-Pacific (APAC) is expected to grow at an accelerated pace in the mobile payment market during the forecast period, 2019–2026. Developing economies such as China and India are the key contributors to the region’s growth momentum due to the rising e-commerce activities in these countries. According to the Ministry of Industry and Information Technology, in 2016, the number of mobile payment transactions surpassed USD 9.27 trillion in China alone. Additionally, with advancements in smartphone technology and the prevalence of the internet, most stores and services in Southeast Asia are accepting payments from their customers through QR codes or Near Field Communication.
NFC Technology to Gain Traction in LATAM Mobile Payment Market
Growing technological advancement and innovation in Brazil, Columbia, and Argentina are expected to drive Latin America’s mobile payment market in the coming years. For instance, in 2019, Visa Inc. announced the launch of VisaNet processing in Argentina, introducing new payment innovation and service to Argentina’s sellers and buyers. Mobile payment through NFC technology is expected to witness considerable growth in the region due to various government initiatives toward a cashless culture.
The UAE to Lead Growth in MEA Market
With the concept of mobile payments taking roots in the Middle Eastern countries such as the UAE, South Africa, and Saudi Arabia, technological progress continues to reach greater heights. The opportunity to complete a wide range of transactions for low and high-value tickets for day-to-day operations with innovative technologies accelerates the reduction of cash from the ecosystem. For instance, according to Travel.State.Gov, the UAE is one of the leading countries in the Middle East and North Africa region considering VISA contactless transactions, with transaction penetration recording 18%. Furthermore, M-Pesa, the leading mobile money wallet service in Africa, claims to have over 28.5 million active users carrying out more than 17 million transactions a day in Africa.
Some of the prominent players in the global mobile payment market are WePay Inc, Alipay, PayPal, Apple Pay, WePay, Verifone, Samsung Pay, CyberSource, PayStand, Payoneer, Paymentwall, Heartland Payment Systems, First Data, Amazon Pay, and Stripe.
Payment Processing Solution Market Segmentation
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