International Data Corporation (IDC) predicts worldwide mobile payments will account for $1 trillion in value in 2017, up 124% from the less than $500 billion expected in 2015.
Asia/Pacific markets will contribute to this growth greatly as mobile commerce transactions with remote payments take off across the region. The analyst house believes that the limited take-up of plastic cards in emerging Asia/Pacific markets will force potential m-payments behavior to shift to using bank account linked mobile wallets.
"Smartphone adoption has grown much more rapidly than general banking and card adoption in the Asia/Pacific region," says Shiv Putcha, sssociate research director at IDC Asia/Pacific. "Recent focus on financial inclusion policies in various countries has given a boost to connecting the unbanked. This phenomenon, coupled with the innovation of semi-closed wallet schemes linked to bank accounts, has given a major boost to mobile payments in Asia-Pacific."
He says the mature Asian economies will remain card payment leaders and view mobile payments as an efficiency driver with proximity services seeking to displace the need for physical swiping of cards. The remaining Asian markets will look at mobile payments as a GDP booster and to address financial inclusion imperatives.
IDC's perspective coincides with the release of a report by Consult Hyperion on behalf of Payments UK, which forecasts that within the next five years, widespread mobile adoption aligned with up-and-coming biometric security improvements and regulatory initiatives will lead to a growing emphasis on the mobile phone as the primary means of paying for goods and services and managing accounts.
Ten years down the line, further refinements in development gains will usher in a new era of wearable payments from more affordable smartwatches and other innovations, states the report.
Payments UK commissioned the paper ahead of its World Class Payments report, in which it will set out a vision of what payments of tomorrow could look like if built on clear evidence of all types of customers’ needs.
Payments UK chief Maurice Cleaves says: "Given the pace of change, and customers' increasing appetite for speed and convenience, the big question is: What on earth is coming next"
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