Mobile Payment Transaction Market: Payments Through NFC Will Grow by 59% in 2016
Mobile payment transaction volume will grow by a massive 42% to reach 26,923.7 Mn in 2016, up from 18,969.8 Mn in 2015. In terms of value, this will represent nearly US$ 768.78 Bn, up from US$ 549.91 Bn in 2015.
Mobile payments will continue to be strong in APEJ and Africa, as unlike US and Europe, a majority of consumers don't own a credit card, and are making a direct shift from cash to mobile payments. Growth will be particularly robust in China, where the entry of Apple and Samsung earlier this year has led to a renewed interest, sprucing up the already fiercely-competitive landscape.
While strong adoption in China will continue to boost the mobile payment market in Asia Pacific, making it the leading market globally in terms of volume, Africa will maintain its numero uno position in terms of value. The tremendous success of M-Pesa in Kenya has influenced consumers and businesses in other African countries to adopt mobile money, leading to a rapid increase in the Africa mobile payment market. Africa currently accounts for nearly 32% revenue share of the global mobile money market, with a subscriber base of over 100 million. Outside of Asia Pacific and Africa, the U.S. and Western Europe remain the other lucrative regions for mobile payment transaction market globally.
While mobile payment transactions will continue to grow, existing challenges, such as slow adoption of smartphone compatible POS systems by retailers will continue to impede growth. "While a 42% volume growth looks staggering, there's more to what meets the eye. Apart from a few countries, consumers haven't fully embraced mobile payments, in spite of its relatively better security features. However, given the enormous advantages mobile money offers over traditional payment options, it won't be long before mobile payments become as ubiquitous as credit cards", FMI said in its report.
By technology, SMS and WAP/WEB will continue to account for most of the transactions conducted worldwide. Mobile payments conducted through SMS will witness a year-on-year growth rate of over 28% and total US$ 385 Bn in revenues. Payments made through NFC, widely touted as the technology of the future, will witness the highest y-o-y growth rate, increasing at over 59% in 2016.
Money transfer and merchandise purchases account for over 90% revenue share of the global mobile payment transaction market on the basis of end-use 'purpose'. Mobile payments made for merchandise purchases will be worth US$ 323.73 Bn in 2016, up from US$ 228.32 Bn in 2015. Money transfer, the largest end-use purpose in the mobile payment transaction market, will grow by over 38% to surpass US$ 381 Bn in revenues.