A recent report published by Transparency Market Research reveals that by 2018, the global mobile wallet market is expected to reach USD 1,602.4 billion growing at a CAGR of 30.7% from 2012 to 2018. As per the report, EMEA (Europe, the Middle East and Africa) is expected to be the largest market for the mobile wallet industry in 2018.
The global increase in Smartphone penetration is one of the key factors behind this growth in demand for mobile wallets. The report reveals that the advent of affordable options such as budget smartphones and the facilitation of NFC (Near Field Communication) technology both in the user’s device as well as in Point of Sale (POS) terminals are expected to drive this market over the next few years. However, lack of awareness regarding the functioning of mobile wallets as well as considerable concerns among users about security and privacy are a few factors that may hinder market growth. Stakeholders in the mobile wallet ecosystem are attempting to alleviate these concerns and aiming to provide complete safety of personal and financial information.
According to the report, retail formed the largest application of mobile wallets and was valued at USD 144.8 billion in 2011. This trend is expected to continue owing to the ease of payment using smartphones at these locations, as well as initiatives undertaken to equip POS devices in convenience stores. Apart from retail, vending machines are a niche but significant application of the mobile wallet technology and are expected to enjoy considerable support from stakeholders. They provide flexible payment services to users along with better brand recall value, thus benefitting merchants and payment providers alike.
The EMEA region accounted for over 40% of the global revenue share in 2011, due to the dense population in Africa, and widespread public acceptance of mobile wallets in Europe. The Asia Pacific region is expected to witness the fastest growth in terms of revenue over the forecast period, and the market is expected to grow at a CAGR of 31.0% from 2012 to 2018 in this geography. The report identified Visa Inc., MasterCard, American Express Inc., PayPal Inc., Google, ISIS, Square Inc. etc. as the key players in the mobile wallet industry.