According to Juniper Research, one in five mobile handsets will feature mobile wallet functionality by 2018, against less than one in 10 in 2013.
Further, the research firm states that two distinct wallet models are driving mobile wallet growth worldwide. In emerging/developing markets, stored value accounts (SVA) are paving the way for first time financial access for unbanked individuals. Over the next few years, SVA will witness encouraging uptake across sub-Saharan Africa, Asia and Latin America. In comparison, mobile wallet launches in North America and Western Europe are expected to feature contactless payment functionality.
Juniper Research expects the contactless payment market to receive a boost both from the anticipated launch of an Apple iWallet in later part of 2014 and through host card emulation (HCE) and field communications services. In fact, the growing popularity of HCE service may impact service providers? role in contactless payment value chain.
By 2018, the research firm estimates that one in three mobile wallets in developing markets and over 50 per cent of wallets in developed markets will feature contactless payment by 2018. Moreover, the mobile wallet market will further get a boost through high-profile person to person (P2P) payment initiatives such as the United Kingdom?s Paym, which will be integrated into customers? existing mobile banking or payment applications providing users an alternative mode of making payments. In fact, start-up companies such as Venmo and Dwolla are driving P2P market in the United States by targeting younger demographics.
Juniper Research concludes that while P2P mobile payment services have struggled to gain traction in developed markets, financial institutions are keen to commit to them as they can serve as an attractive value-add to consumers in an increasingly cashless society.
