Several nations have evolving landscapes in terms of mobile payment services. There lies an immense opportunity in the emerging and the already developed countries for tapping the potential of services related to non-cash based payments landscape.
The most proficient method that has been identified as effective in the recent past is through the use of Smartphones. The inclination of worldwide consumers adapting to this payment system is enough proof that users are having the alacrity towards the use of mobile wallet platforms. Such platforms will boom the demand for mobile wallet applications to consumers who are willing to shift their purchase decisions and overall brand loyalty to something better and quicker.
What is Mobile Wallet? – In Brief
Mobile wallet is a type of a mobile payment system that allows consumers to pay their bills or purchase of any application by phone anytime, during travel, or from any location. In simple words, the mobile wallet or also known as the m-wallet has customer’s cash stored in his/her mobile as a prepaid facility, which the user can use for various payments. This is a method that is poised to be the most convenient system to use until the mobile has the power and battery backup in a running condition. However, when the mobile battery consumes maximum power due to multiple applications active at the same time, and affectedly gets drained, the mobile wallet cannot be accessed until the device is charged again. This is one of the main key restraints limiting the usability of the mobile wallet application. Nevertheless, the overall key purpose of the m-wallet concept is it to cater consumers with convenient and effective payment methods using mobile domain.
Urging Growth in Mobile Wallet Market
As worldwide customers are enthused by the rising demand for smartphones, the electronic payment companies are vying to make them change their modes of payments for a mobile wallet. These companies that offer a gamut of mobile solutions for smartphone users to buy tickets, transfer money to family and friends, or recharge prepaid connections are sprucing up their services and offerings to achieve a bigger share of this booming market. Various companies are now offering innovative services including text-message based transactions, storing personal information to speed up checkout, as well as making it possible to pay using a phone both while shopping online and at physical stores.
With 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, the surge in the demand for mobile wallets has increased the smartphone penetration, as well as the frequency of mobile wallet applications. These aspects are expected to drive this market over the next few years.
Key Benefit of M-Wallet
As per the industry best experts’ advice, the key benefit in using a mobile wallet is the point when a user faces a transaction failure during the process. The rate of the transaction failure is quite minimal as compared to an average of 20% through other electronic payment gateways. In an ideal situation, most online or mobile payment failures happen at the backend server of the bank, whereas in the mobile-wallet, since users have their cash stored in the wallet, the procedure through bank is bypassed in the transaction.
Note: (A customer would sometimes experience a failed transaction only in times when he/she is trying to deposit the money to his/her wallet).
Market Size and Growth
According to the leading market firms in the industry, the global mobile wallet market is expected to grow at a CAGR of 127.5% from 2012 to 2020. It is estimated that more than 70% smartphone users are willing to adopt mobile payment modes and 15% have already completed the adoption. Nevertheless, the retail sector formed the largest application of mobile wallets in 2011, and it was valued at USD 144.8 billion.
Places Geographically Active
EMEA (Europe, the Middle East and Africa) is expected to be the largest market for the mobile wallet industry in 2018. In 2011, the EMEA region accounted for over 40% of the global revenue share due to the public acceptance of mobile wallets in Europe, and dense population in Africa.
On the other hand, in terms of revenue, the Asia-Pacific region is expected to witness the fastest growth over the forecast period, and is expected to grow at a CAGR of 31.0% from 2012 to 2018.
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