Analyst firm Berg Insight predicts that in-store mobile wallet payments will reach a value of €78bn in Europe and North America by 2017.
In 2012, mobile wallet payments in the EU27+2 region (that is, all 27 member states of the European Union plus Switzerland and Norway) were valued at less than €0.1bn. Berg Insight’s research forecasts growth to €45bn in 2017, equating to 1.6pc of credit and debit card payments.
Along with this, the number of active mobile wallet users is predicted to increase from 0.5m in 2012 to 42m in 2017. This growth will have to be driven by the availability of these services, but Berg Insight claims that nearly half of the EU27+2 countries are expected to have mobile wallet services in place by the end of 2013, backed by companies like Vodafone, Orange, Telefónica, BNP Paribas and Barclays.
In North America, mobile wallet payments were valued at US$0.5bn in 2012, with the vast majority made using the phenomenally successful Starbucks’ app, which had about 7m users at year-end.
However, the universal mobile wallet payments market is already highly competitive in the US, with key players like Google, Isis, PayPal and Square fighting to be the first to reach the mainstream.
Payments using these methods are expected to reach US$44bn by 2017 in North America, with 7.5m active mobile wallet users counted at the end of 2012 growing to 29m in 2017.
For mobile wallet payments to grow, the necessary infrastructure is needed. Berg Insight’s report notes that global shipments of NFC-enabled handsets jumped 300pc in 2012 to 140m units, while annual shipments of NFC-ready POS terminals doubled last year to about 3.9m units sold worldwide. The report predicts 1bn of these handsets and 14m terminals will be shipped in 2017.
The roll-out of mobile wallet services also requires the cooperation of financial institutions, mobile operators, retailers and other businesses. For the competing services, it will also require a unique selling point. “People do not have a problem with cash or payment cards today. Value-added services that enable new shopping experiences before, during and after payments will be what truly distinguish mobile wallets from the traditional payment instruments,” said Lars Kurkinen, telecom analyst for Berg Insight and author of the report.
Mobile wallet image via Tashatuvango/Shutterstock