One in five smartphones will have mobile wallet functionality by 2018 and one-third of mobile wallets will feature contactless payment capabilities, according to a new forecast.
The latest report from Juniper Research found there will be two distinct wallet models.
In emerging markets, store value accounts (SVAs) are enabling first-time financial access for unbanked individuals, particularly across sub-Saharan Africa, developing Asia and Latin America.
In North America and Western Europe, mobile wallet launches are expected to feature contactless payments.
In China, Alipay now has more than 100m wallet users.
The Apple iWallet is coming
The sector is forecast to receive a boost both from the anticipated launch of an Apple iWallet later this year and through HCE (host card emulation)-based NFC (near field communications) services.
HCE is expected to threaten the mobile operator’s role in the contactless value chain.
According to the report, more than one in three mobile wallets – and more than 50pc of wallets in developed markets – will featuring contactless payment by 2018.
The report also claimed the mobile wallet profile would 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.
At the same time, it argued the mobile P2P market in the US was being driven by a number of start-ups, including Venmo and Dwolla, targeting younger demographics.
“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,” said report author Dr Windsor Holden.
Mobile money image via Shutterstock