Mobile Money Market: Smartphone Proliferation & Technological Innovation Key Growth Drivers

Have you ever paused to think about the changes that smartphones have brought to our lives? From real-time news updates and weather forecast to live videos and streaming music, smartphones have truly been the technological revolution of this millennium so far. And, if you think smartphone applications have reached a saturation point, you might be mistaken because soon they might replace your debit- and credit- cards, or may be the manner in which we carry out our daily transactions.

Mobile Money Market: Overview

Mobile money has been heralded as the future of payments - the market was valued at US$ 392 Bn in 2014 and it is anticipated that by 2020, the global money market will be worth US$ 2.9 trillion. Increase in smartphone penetration, development of payment gateways with advanced security, and the convenience of making mobile payments are the key factors driving the market. The emergence of Apple Pay, along with the expansion plans of Google are anticipated to contribute to the growth of the global mobile payment transactions market.

The growth of the e-commerce industry has also augured well for the growth of the mobile payment transactions market. The popularity of e-commerce apps, such as Amazon and eBay has introduced consumers around the world to the ease of carrying out transactions through mobile phones, and this has provided an impetus to the market.

Although major players in the mobile payment transactions market are consistently working on improving customer experience, concerns about data safety can be the restraints for the growth of the mobile money market. Also, some developing countries with high number of smartphone users lack the infrastructure required for carrying out transactions smoothly. The growth of the mobile money market will depend, to a large extent, on how these challenges are dealt with.

Mobile Money Market by Technology

On the basis of technology, the mobile money market can be broadly segmented into,

• Wireless Application Protocol (WAP)
• Unstructured Supplementary Service Data (USSD)
• Near Field Communication (NFC)
• Short Message Service (SMS)

According to the research done by FMI, WAP and NFC are the two technologies through which a majority of transactions will be carried out. It is anticipated that the WAP and NFC segments will witness a CAGR of 41% and 46% respectively.

Application Analysis of Mobile Money Market

Key application segments of the global mobile money market include,

• Merchandise purchase
• Bill payment
• Ticketing
• Money transfer
• Others

According to FMI’s analysis, all of the aforementioned segments will witness steady growth rate through 2020.

Region-wise Outlook of Mobile Money Market

The number of smartphone users in China and India is around 700 Mn and it is anticipated that figure is anticipated to cross the 1 Bn mark by 2018. Considering the sheer volume of the number of users in these countries, key players in the mobile payment transaction market, such as Visa, MasterCard, Apple Inc., and Google are developing strategies to consolidate their position in these countries. Also, solid infrastructure in Japan and South Korea presents a strategic opportunity to the key players to penetrate the market. Consumer awareness about mobile payment transactions is high in Japan and South Korea, and it is only a matter of time before mobile payments become the norm in these countries. Considering the available opportunities in China, India, Japan, and South Korea, it is anticipated that the mobile money market in Asia Pacific will witness a CAGR of 22% through 2020.

Other key regions for the global mobile payment transactions market include North America and Europe. Eastern Europe, which currently has a modest share in the global mobile transactions market, is forecasted to expand at a CAGR of over 29% through 2020.

This article is based on FMI’s market research report, Mobile Payment Transaction Market: Global Industry Analysis and Opportunity Assessment 2014 - 2020.