Mobile payments: a bright future ahead

Mobile payments: a bright future ahead

According to a study conducted by “Research and Markets”, the value of the mobile payment market is expected to increase from 12.34 billion dollars in 2014 up to 78.02 billion in 2019. This represents an increase of 44.6% in 5 years for the world’s fastest growing market.

With mobile phones providing access to an increasing variety of content, new mobile services are becoming more and more popular with consumers. Such services are also gaining ground with businesses in several economic sectors: retail, the travel industry, financial institutions (especially banks), healthcare and transport.

The money generated by this business will open up new markets for the entire payment ecosystem. Mobile phone operators, banks and payment platform providers should see an increase in revenues.

An incredible variety uptake of mobile solutions by country

Each country has its own payment culture and habits. For certain countries such customs are deeply rooted and take time to change. ING Bank conducted an extensive survey of European, North American and Australian consumers on their behaviour with respect to mobile payments. The notion of a “society without cash” is a myth for some countries. Half of Europeans have reduced their use of cash in favour of other payment methods, whilst day-to-day habits remain unchanged for the other half of the population.

On average, one in three Europeans has already executed a transaction on a phone or tablet. However, a significant contrast exists in the popularity of these mobile solutions between different countries. The Dutch, for example, make fewer mobile payments (13%) than the Poles (39%) and Turks (46%).

Mobile banking solutions in high demand amongst consumers

If we focus on the responses to the ING study, we can see that speed is cited by 50% of those interviewed as a positive, closely followed by ease of use. As for the negative points, it is the lack of confidence and lack of opportunity to test that were the most frequently cited.

Another lesson from this study is that banks may be reassured! Indeed, they are the frontrunners (84%) when customers are asked whom they would trust to provide mobile payment solutions. However, they must be aware of solutions coming from the likes of Google, Apple and Facebook, which could impose themselves on the market. Banks must therefore act quickly to take advantage of the trust of their customers and to propose appropriate and efficient mobile payment solutions. If they fail to act then customers may soon turn their attention elsewhere.

It is clear that the strong growth of the mobile payment market represents tremendous opportunities for the entire payment ecosystem. However, it is essential to adapt to the specificities of different countries. See you in 2019 to see if the predictions of “Research and Markets” were correct or too optimistic.