The use of contactless payments is expected to reach 200 million by the end of 2016. A new study by Juniper Research reveals that historically, the growth of mobile wallet usage emerged due to the rise of P2P (person-to-person) services for the unbanked in developing markets.
A previous LTP article further supports findings of mobile payment options introduced to rural residents in emerging countries in Africa. Financial inclusion motivated by governments, the private sector and much of the international digital payments community has enabled contactless payment technology to be the gateway into the financial system for many unbanked individuals.
While Apple has built momentum and awareness in the contactless space with the launch of Apple Pay, its successors—Samsung Pay and soon, Android Pay—are perceived to have less of a challenge introducing their payments technologies to the market.
In addition to new mobile device payment services, many banks have successfully partnered with card networks like MasterCard and Visa to develop their own branded contactless wallets. Many of the mobile wallet applications developed by leading banks are made with Apple Pay compatibility to streamline in-app purchases.
LTP has covered the challenging deployment of the US-based retail consortium
MCX (Merchant Customer Exchange) and the lengthy planning of its payment network CurrentC.
According to research author Dr. Windsor Holden, “By the time MCX launches, US consumers will have a choice of perhaps half a dozen other mobile wallet solutions, not to mention the fact that an increasing number will also have contactless payment cards. In addition, the reliance on store brand payment cards could ultimately be a fatal flaw for the service.”
Other key findings from the report include:
- In developing markets, there has been a significant upscaling of wallet usage for savings and loan disbursements while more than 100 million are now in use for micro-insurance.