Increasing Adoption of NFC to Create Opportunities for the Global Mobile Wallet Market until 2020

Technavio analysts forecast the global mobile wallet market to grow at a CAGR of 34.58%. Mobile wallets enable customers to access and avail offers, coupons, and rewards. It also confers more security than carrying cash while travelling. The transaction failure rate of a mobile wallet is minimal (less than 10%) when compared to other electronic payment gateways that have an average of 19%-20% failure rate. Such failures are mostly blamed on banks' network.

The growing use of smartphones and tablets in developed countries has popularized mobile wallets. This has forced merchants to adopt platforms that facilitate mobile payments at their outlets. The use of NFC and POS terminals for such payments has increased the value proposition and effectiveness of vendors' marketing efforts. Technavio predicts that this rise in adoption of NFC and POS terminals may boost the global mobile wallet market during the forecast period.

Mobile wallets are increasingly being used for transactions in m-commerce. The advantages of m-commerce include easy access to a product without any time and location constraints, flexible and easy payment services to clients, and enhanced brand recall value, which should benefit vendors in the long-run.

A significant percentage of the population does not have access to banking or any financial services. But of the 700 million people that had access to financial services in 2015 a majority people have smartphones. Mobile wallets facilitate access to financial services at affordable prices and help people manage their accounts.

In many developing countries, mobile network operators (MNO) have deployed agents in rural and remote locations to create awareness about mobile wallet services. Money transfer is the most widely used feature as it provides real-time transactions, allowing maximum convenience for end-customers.