Over the past decade, various mobile payment technologies including apps have generated a groundswell of interest among consumers and businesses alike. Their popularity rides on the back of proliferation of smart devices that are promising for consumers to help them make hassle-free, easy, and secure payment transactions using wireless technologies. The staggering number of smartphone users world over realizing the disruptive potential of mobile-based payments paved the way for the adoption at large.
Riding on the wave of digitization across the globe, unprecedented progress has been made in the area of mobile payment apps expanding the scope of contactless payments, especially for online purchases. Technologies and communication protocols such as radio-frequency identification (RFID) and near-field communication (NFC) have emerged as promising in the mobile payment technologies market. These payments have not only made transactions ultra-fast and convenient but eventually accelerated the overall checkout process for customers as well.
Witnessing the vast potential of contactless card payments and other similar technologies, the global market is projected to proliferate at an astounding CAGR 20.9% during 2017–2024, if an estimate by Transparency Market Research (TMR) is to be believed.
Which type of contactless payment technology is likely to witness substantial potential for adoption?
In recent years, an assortment of mobile payment technologies gathered steam for smartphone users and smart devices making mobile payments. The major types are proximity payment and remote payment systems. Of these, proximity payment technologies, which mainly include NFC and QR code payment, appears as potentially promising in the market. The burgeoning adoption of proximity payment technologies will increasingly be underpinned by the rising popularity of NFC-enabled contactless payment. The high reliability and unparalleled security enabled by the NFC technology has made it a compelling choice among mobile wallets providers.
However, companies providing contactless payments and mobile wallets need to address spiraling concerns of security and fraud to counter the dampening of demand over the coming years. A number of globally prominent companies offering payment solutions are acquiring mobile payment technology firms in emerging economies. This not only proves useful in bolstering security of their digital payment services, but also consolidate their portfolio fueling their growth.
MasterCard announced in March 2018 that it has acquired Oltio (Pty) Ltd. from the Standard Bank of South Africa Limited. Oltio specializes in advanced security and robust authenticated payment solutions and MasterCard will leverage on the former’s potential to bolster its capabilities in mobile banking applications. The technologies will be used by the U.S.-based multinational financial services corporation to provide platforms for payments and bill payments and to improvise and expand on digital services for merchants and issuers in emerging markets.
What makes emerging economies stands apart in the unprecedented adoption of mobile payment technologies?
On a regional front, Asia Pacific and North America have appeared as the most lucrative for mobile payment technologies. A growing number of early adopters of mobile payments in various economies of North America accounts for its prominence.
Asia Pacific is notably lucrative, especially on account of attractive prospects coming from the countries in South East Asia. In particular, a burgeoning investment by various industry verticals in the emerging economies of the region such as India and China is likely to act as a robust consumer base for mobile payment technologies. According to an estimate by TMR, the regional market for mobile payment technologies as a whole will touch a valuation of US$753.12Bn by the end of 2024.
In recent years, the striking thrust by several regional governments toward the adoption of a cashless economy has provided a shot in the arm boosting the adoption in Asia Pacific