Mobile Payment Market Size, Share & Trends Analysis Report By Technology, By Payment Type (B2B, B2C, B2G), By Location, By End Use, By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global mobile payment market size was valued at USD 31.5 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 31.8% from 2021 to 2028. The growth can be attributable to the increasing use of mobile devices to make various payments to government bodies. In the U.S., the availability of mobile payment options in various government transactions complies with a memorandum signed by former President Barack Obama in 2012. According to a study published by Mobile Payment Conference in 2018, the number of mobile payment users in the U.S. is expected to reach 74.9 million by 2022 in line with the growing use of mobile devices for paying taxes and other government bills.

The growing mobile commerce industry is also expected to play a vital role in driving the growth of the market. Several market players operating in the mobile commerce industry are focusing on strategic partnerships, mergers and acquisitions, and other strategies as part of the efforts to enhance their offerings. For instance, in September 2020, mobile commerce technology provider Venue Next, Inc. announced a partnership with advanced ticket solution provider Ticketmaster to provide contactless ordering and payment services to Ticketmaster’s user base. The partnership envisaged the features being made available at all venues powered by Ticketmaster’s technology when they tap into digital ticketing capabilities.

Advances in blockchain, Artificial Intelligence (AI), and machine learning, among other latest technologies, bode well for the growth of the market. Various mobile payment solution providers are focusing aggressively on embedding these advanced technologies in their mobile payment solutions and enhancing their offerings. For instance, in May 2020, Citcon, a payment gateway provider for online, in-store, and mobile payment solutions, announced a partnership with Flexa, a digital network, to help merchants in accepting cryptocurrency as a payment option. The partnership envisaged the merchants connected to Citcon being able to accept any of the digital currencies, such as Bitcoin, and Ethereum, supported on the Flexa network.

A growing number of self-checkout retail stores across the globe is also contributing to the growth of the market. According to a study published by media company EnsembleIQ, the global shipments of self-checkout terminals increased by 52.0% in 2019. Through this increasing use of self-checkout terminals worldwide, companies operating in this space are entering into a partnership with mobile payment providers for meeting this increasing demand. For instance, in January 2021, software company Impulsify Inc. announced a partnership with payment solution provider Shift4 Payments, LLC. The partnership envisages Impulsify Inc.’s self-pay retail technology being integrated with Shift4 Payments, LLC.’s contactless payments.

However, security concerns associated with mobile payments are hindering the growth of the market. According to the statistics provided by Payvision, a financial service provider, mobile payment fraud alone accounted for 27% of online sales in 2019, a significant increase from 18% in 2018. Out of the different payment fraud types in 2018, account takeovers accounted for 89% of digital fraud losses. Account takeover fraud involves fraudsters gaining access to customers' accounts through a stolen device or mobile malware.

COVID-19 Impact Analysis

The outbreak of the COVID-19 pandemic has had a positive impact on the mobile payments market. Several companies entered into partnerships to meet the increasing demand for mobile payments in the wake of the outbreak of the pandemic. For instance, in September 2020, Visa, a payment technology company, and Vipps AS, a fintech company based in Norway, partnered to accelerate mobile payments adoption across Europe. The partnership envisaged clients of Visa leveraging the capabilities of the Vipps platform to develop digital wallets and offer customers a new way to manage their payments.

Technology Insights

The mobile web payment segment dominated the market in 2020 with a revenue share of more than 23.0%. The growth of the segment can be attributed to the security and flexibility provided by mobile web payment solutions. The growing popularity of m-commerce also bodes well for the growth of the segment. According to the statistics provided by SimiCart, an e-commerce solution provider, m-commerce sales are expected to reach USD 3.6 trillion by 2021, up 22.3% from 2020.

The near-field communication segment is expected to witness the fastest growth over the forecast period. NFC technology allows merchants to integrate customer loyalty programs into their payment processes and customers to redeem their coupons immediately using mobile phones. The rise in e-commerce platforms and continued implementation of the latest technologies in financial transactions are expected to drive the growth of the segment. The growing awareness about smart cards and plastic money among consumers is also emerging as one of the major factors driving the adoption of NFC-based payments.

Payment Type Insights

The B2B segment dominated the market in 2020 with a revenue share of more than 60.0%. Aggressive investments by private equity and venture capital funds in B2B payments are creating new opportunities for the growth of the segment. According to a study by LLR Partners, a private equity firm, around 80 B2B companies across the world received investments from private equity and venture capitalists in 2018. Moreover, banks are also increasingly adopting B2B mobile payments to enhance the experience for business customers. For instance, in September 2018, Bank of America allowed its corporate cardholders to use Samsung, Apple, and Google mobile payment apps by adding mobile wallet support to the cards.

The B2C segment is expected to witness the fastest growth over the forecast period. B2C payments are made by consumers while buying a product or subscribing to a service for personal use. The increasing share of mobile payments in the e-commerce industry vertical is driving the growth of the segment. According to a study conducted by Salesforce, mobile consumers account for 60% of the world’s total e-commerce traffic. The growing number of mobile users is one of the major factors that are expected to drive the preference for mobile-based online purchases.

Location Insights

The remote payment segment dominated the market in 2020 with a revenue share of more than 59.0%. Remote payments have been getting popular, particularly in the wake of the outbreak of the COVID-19 pandemic, as remote payments do not require any direct interaction. Several companies are launching apps to allow customers to make payments remotely. For instance, in March 2020, SumUp announced the launch of mobile payments and invoicing across Europe to help consumers in paying remotely and safely through smartphones.

The proximity payment segment is expected to witness the fastest growth over the forecast period. Proximity payments require the payer and the payee to be in proximity and the communication takes place between the payer’s and the payee’s devices via QR codes, NFC, or Bluetooth connectivity. The outbreak of the pandemic has particularly changed the way customers prefer paying for services and goods. According to eMarketer, 100.0 million Americans would be using proximity mobile payment methods by 2025.

End-use Insights

The BFSI segment dominated the market in 2020 with a revenue share of more than 22.0%. Several banks are trying aggressively to introduce mobile payments, thereby contributing to the growth of the segment. For instance, in March 2019, Mexican Central Bank with Amazon announced plans to introduce a mobile payments system allowing users to make online purchases using QR codes. The move would also provide Amazon with a new customer base as half of the Mexican population is still unbanked.

The retail and e-commerce segment is expected to witness the fastest growth over the forecast period. The growing number of smartphone users and the subsequent rise in mobile commerce sales bode well for the growth of the segment. Apps are emerging as the most preferred way of shopping through smartphones. According to the statistics provided by J.P. Morgan, 54% of mobile commerce payments are done through dedicated shopping apps. Increasing cross-border shopping is also emerging as one of the major factors driving the preference for mobile payments. According to the study conducted by J.P. Morgan, China accounts for 49% of the cross-border e-commerce shopping, followed by the U.K. with 12% and Japan with 7%.

Regional Insights

Asia Pacific dominated the market and accounted for the largest revenue share of more than 34.0% in 2020. The increasing smartphone penetration rate in Asian countries, such as Japan and Thailand, is particularly driving the growth of online retailing of packaged drinks and food. According to PwC, Thailand accounted for 10.7% of the online sales of packed drinks and food in Asia Pacific. The growing sales of packaged food through online retail channels are expected to drive the growth of the market in Asia Pacific over the forecast period.

In North America, the market is anticipated to witness significant growth over the forecast period. North America is home to several key market players. The region has also been an early adopter of the latest and advanced technologies. The growing number of unmanned stores in the U.S. is also driving the adoption of mobile payments. For instance, in November 2019, Ahold Delhaize, a supermarket based in the Netherlands, announced the opening of a cashier-less store in the U.S.

Key Companies & Market Share Insights

Major players in the market are pursuing strategies, such as new product launches, strategic agreements, and product upgrades, as part of the efforts to cement their market position. They are also focusing on striking strategic partnerships with financial service providers to enhance customer experience. For instance, in April 2021, MoneyGram International announced a partnership with Sigue, a B2B and P2P payment company based in the U.S. The partnership would allow Sigue’s customers to access MoneyGram International’s new MoneyGram as a Service business line and will also allow other financial institutions on the Sigue platform to experience MoneyGram International’s latest API-driven payment technology.

Key players are also investing aggressively in enhancing their product offerings. For instance, in January 2021, Safaricom announced the launch of the M-Pesa bill management service. The service is mainly launched to target schools, utilities, landlords, and other businesses that get repeated customer payments. This platform is focused on providing details to the customer, such as their pending payments, reminders regarding bills, and electronic bills after the payments are done. Some of the prominent players in the mobile payment market include:

• Google (Alphabet Inc.)

• Alibaba Group Holdings Limited

• Amazon.com Inc.

• Apple Inc.

• American Express Company

• M Pesa

• Money Gram International

• PayPal Holdings Inc.

• Samsung Electronics Co. Ltd.

• Visa Inc.

• WeChat (Tencent Holdings Limited)

Mobile Payment Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For the purpose of this study, Grand View Research has segmented the global mobile payment market report based on technology, payment type, location, end use, and region.

• Technology Outlook (Revenue, USD Billion, 2016 - 2028)

  • Near Field Communication

  • Direct Mobile Billing

  • Mobile Web Payment

  • SMS

  • Interactive Voice Response System

  • Mobile App

  • Others

• Payment Type Outlook (Revenue, USD Billion, 2016 - 2028)

  • B2B

  • B2C

  • B2G

  • Others

• Location Outlook (Revenue, USD Billion, 2016 - 2028)

  • Remote Payment

  • Proximity Payment

• End-use Outlook (Revenue, USD Billion, 2016 - 2028)

  • BFSI

  • Healthcare

  • IT & Telecom

  • Media & Entertainment

  • Retail & E-commerce

  • Transportation

  • Others

• Regional Outlook (Revenue, USD Billion, 2016 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

  • Middle East & Africa