Global mobile payments are expected to grow by a compound annual growth rate (CAGR) of 39% through 2020. This year mobile payments are projected to hit $769 billion, rising to $2890 billion in 2020.
According to a new report from FMI,
global mobile payment transaction volume will grow by a massive 42% to reach 26.9 billion in 2016, up from 19.0 in 2015. In terms of value, this will represent $769 billion in 2016, up from $550 billion in 2015.
2015: $550 billion
2016: $769 billion
2017: $1069 billion
2018: $1486 billion
2019: $2065 billion
2020: $2890 billion
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.
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 $385 billion in revenues. Payments made through NFC, widely touted as the technology of the future, will witness the highest YOY 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 $324 billion in 2016, up from $228 billion in 2015. Money transfer, the largest end-use purpose in the mobile payment transaction market, will grow by over 38% to surpass $381 billion in revenues.
Leading players operating in the global mobile payment transaction market are PayPal, Visa, MasterCard, Google Wallet, Apple Pay, Samsung Pay, and Alipay.
FMI forecasts the global mobile payment transaction market to increase at a CAGR of 39.1% through 2020 and reach $2.89 trillion in revenues.
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