Mobile Wallet Market Analysis By Application (Grocery Stores, Public Transportation, Restaurants, Retail, Vending Machines) And Segment Forecasts To 2020

Published: September 2014 | ISBN Code: 978-1-68038-092-7 | Report Format: PDF

Industry Insights

The mobile wallet market size was estimated to be USD 425.8 billion in 2013. This technology allows consumers to make payments by storing payment credentials and making them available at the Point of Sale (POS). It provides financial institutions and merchants a customizable platform for enhancing customer experiences and client engagement.

It facilitates the verification of personal identification documents including social security numbers, passport, driving license along with identifying the credential of the consumers. It can be integrated with the authentication programs serving the combined purpose of mobile payment and authentication. These technological advancements are anticipated to drive the mobile wallet market growth over the next six years.

The market is classified by communication range into remote and proximity payment. Remote payment accesses mobile payment back-end system through communication networks, whereas proximity payment allows completion of payments through short-range communication technologies.

Mobile wallet serves the dual purpose of remittance services and financial management, which is expected to positively impact the market. It also offers banking services at affordable prices combined with allowing customers in the effective management of accounts, which is projected to positively elevate mobile wallet industry growth.

Rising penetration of smartphones and growing data usage are expected to be the driving factors for industry growth. Further, advancement of 3G and 4G networks along with government initiative encouraging the use of this technology is anticipated to trigger the market demand. Mobile payment offer enhanced user experience and security along with reducing the hassle of carrying multiple cards.

Over the past few years, payment technologies including NFC have evolved as a replacement to the traditional payment and transaction techniques due to advancement in security features along with its integration in POS terminals and mobile devices, which is anticipated to be a market driver for future growth prospects.

Industry participants are developing the required infrastructure along with the rise in collaboration across the value chain such as banks, payment service providers, and technology vendors, which is projected to accentuate mobile wallet market growth over the forecast period.

The technology allows payment without using traditional banking channels with the basic requirement of smartphone and associated application. However, technology infancy and security concerns along with heavy investments and deployment issues may curb industry growth over the forecast period.

Application Insights

The market can be categorized on the basis of application into grocery stores, public transportation, restaurants, vending machines, and retail. It helps consumers in evaluating products and checking prices with integrated comparison shopping capabilities, which simplifies the process of determining the best service or product. The retail sector is expected to grow at the fastest CAGR of 32.2% over the forecast period. It also accounted for the largest application segment in 2013, generating over USD 190 billion revenue in 2012. 

Various initiatives undertaken to equip retail stores with easy payment options and POS devices are expected to impel mobile wallet market growth. Additionally, various initiatives by Visa and MasterCard for encouraging retailers to install NFC POS terminal readers, which accept new chip-based cards and NFC, are expected to drive market growth over the forecast period.

Vending machines offer flexible payment services and enhanced brand recall value, benefiting the payment providers and customers. Extensive use of the technology in public transportation allows customers in the advanced booking of tickets for public transportation.

North America mobile wallet market, by application, 2012-2020, (USD Billion)

orth America mobile wallet market

Regional Insights

North America is projected to be the dominant regional market owing to the availability of highly advanced infrastructure and presence of established market players. The technology is witnessing significant growth momentum and lucrative opportunities in the Asia Pacific region owing to the varied initiatives undertaken by the Chinese Government by increasing policy support for latest payments systems. Further, the presence of cheap labor and low-cost technology in countries such as India and China is estimated to positively impact industry growth in this region.

Competitive Insights

The notable stakeholders in the industry include card operators, device manufacturers, value-added service providers, financial/bank institutions, Mobile Network Operators (MNO), legal authorities, users, and merchants/retailers. MNOs are anticipated to be a critical part of the technological process with payment networks and merchants attempting to occupy significant market share.

Major players in the market include Apple, Google, Blackberry, PayPal Inc., Visa Inc., MasterCard Inc., First Data, ISIS, Samsung, American Express, AT&T, Amazon, and Citrus Payment Solutions. Several industry players are investing profusely in R&D for developing innovative technologies for achieving maximum product differentiation. The existing manufacturers are focusing on enhancing their distribution channel to survive the emerging competition in the market.

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