Why we’ll all soon be using our devices to pay for everything.
The amount of people using their mobile phones to pay for everyday goods is set to increase greatly over the next few years, a new report has found.
Currently, less than one in ten handsets currently has this ability, but the figure will more than double to reach one fifth of all devices by 2018, according to Juniper Research’s ‘Mobile Wallets: Strategies for Developed and Developing Markets 2014-2019’ report.
According to the report, over one in three mobile wallets, and more than 50% of wallets in developed markets will feature contactless payment by 2018.
However, the increase will also be driven by major growth in developing markets, the report claimed, as consumers throughout the world begin embracing mobile payments.
Emerging markets will be boosted by an increase in Stored Value Accounts (SVAs), which are enabling financial access to the so-called ‘unbanked’ – those without ties to traditional banking institutions – for the first time. Growth will be particularly high in sub-Saharan Africa, Latin America, and developing Asia, where China’s Alipay service already boasts over 100 million wallet users.
Meanwhile, growth in western markets will be spurred on by an increase in the availability of NFC contactless payment functionalities in future mobile wallet launches. This includes the possible launch of an Apple iWallet later this year, following Google’s existing Wallet service.
The report also predicts that the profile of mobile wallets will be bolstered through high-profile P2P (Person to Person) payment initiatives such as the UK’s Paym, which will be integrated into customers’ existing mobile banking or payment apps as an additional way to pay.
An increase in start-ups targeting younger demographics in the mobile P2P market, such as Venmo and Dwolla in the US, will also spur on widespread growth.
Report author Dr Windsor Holden said: "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."