A new Transparency Market Research report, “Mobile Wallet Market - Global Industry Analysis, Size, Share, Growth and Forecast 2012 – 2018” provides an overview of the growth factors and future prospects of mobile wallet technology.
According to the report, the industry is poised to experience rapid growth with the market generating revenue of $1.6 trillion by 2018. That amounts to a compound annual growth rate (CAGR) of 30 percent for the period.
The penetration of smartphones is one of the biggest drivers for this technology, as most mobile wallets require the device to function.
The retail sector makes up the largest application of the mobile wallets market, which was valued at $144 billion in 2011. Public transportation, vending machines, restaurants and grocery stores are other important applications of the market.
Factors such as industry participants, components, consumer type, functionality and geography will also determine growth. While mobile wallet technology is very functional, the adoption rate thus far has been relatively low, especially here in the U.S.
Europe, the Middle East and Africa (EMEA) is predicted to be the largest market for the mobile wallet industry in 2018, followed by the Asia-Pacific region. Both regions have a number of developing countries with limited or non-existing banking infrastructure. Additionally, EMEA governments are implementing mobile commerce technology to provide citizens with a wide range of financial services.
By lessening global consumers’ reliance on traditional payment channels, like cash, checks or credit cards, mobile wallets are gaining in popularity in developing countries and elsewhere.
Security concerns remain the most significant hurdle the technology faces, somewhat inhibiting customer acceptance and limiting growth.
Further, the technology needs the participation of Mobile Network Operators (MNOs), financial institutions, payment networks, intermediaries, merchants and consumers. Without the necessary participation of these key players, the success of mobile wallets will no doubt continue to be limited.