The growing use of smartphones and the rising penetration of non-traditional payment gateways have led to an increase in the adoption of mobile wallet technology. Companies such as Google, Amazon, and Apple are jumping into the mobile payment space for their transactions. Such moves are a proof that mobile wallet technology holds significant promise and the market is expected to boom in the coming years. The trend is catching on even in smaller and yet-underdeveloped markets. For example, the Bank of Jamaica (BOJ) has granted a license to the Jamaica Co-operative Credit Union League (JCCUL) for Conec, which is a mobile wallet payment service. This is expected to propel the use of mobile wallet technology on a commercial basis in the country.
According to Transparency Market Research (TMR), retail payment, restaurants, vending machines, and public transportation are the important end use applications, enabling the growth of the mobile wallets market
TMR answers three key questions that companies operating in the global mobile wallet industry may have:
Q. What are the recent developments in the mobile wallet market?
Amazon, with an intent to spread the adoption of its payment service to third-party websites, has recently launched Amazon Payments Global Partner Program. This move is expected to help e-commerce platform providers and others, to integrate with Amazon Payments, enabling them to offer the option to “pay with Amazon” during checkout.
Chase Pay mobile wallet has partnered with MCX to enable favorable payment economics and indemnification of merchants, against any customer-initiated fraud. Chase Pay is expected to go to the market with a cloud-based mobile wallet that will work with all smartphones.
Q. What are the factors challenging the growth of the market?
Even though it is widely believed that a few layers of the mobile payment process are secure, there are ways for malicious cybercriminals to get their hands on consumer data. Fraudulent incidences such as the one associated with the use of Venmo wallet are restricting the adoption of mobile wallet. A Venmo user’s account was hacked and a different email address and mobile device were added to the victim’s profile without his consent. Although Venmo has now updated its security protocols to include multifactor authentication, events such as these could potentially resulted in consumers backing out from the use of mobile wallets.
Q. What factors can be identified as core drivers behind the adoption of mobile wallet?
Mobile wallet services fall under financial supervision imposed by regulatory authorities, thus assuring consumers about the safety of their usage. Convenience is one of the key factors driving the adoption of mobile wallets. The elimination of the use of paper serves as an added advantage of using mobile wallet technology. This is particularly appealing to the urban society that possesses an increased awareness regarding environmental conservation. Moreover, encouragement by governments of various countries to adopt this green technology for transactions is helping the mobile wallet market to grow.
The rise in point-of-sale terminals and near field communication (NFC) enabled smartphones are other factors driving the adoption of mobile wallets worldwide. Furthermore, market players are revolutionizing the mobile wallet technology to make it compatible with mobile payment solutions. All these factors will encourage the adoption of mobile wallets and will help the market to grow in the coming years.