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 (or
mCommerce) transactions with remote payments take off across the region. Driven by a high number of initiatives and diverse mCommerce maturity level, Asia/Pacific is expected to lead the world in mobile payment (or mPayments) developments – according to International Data Corporation (IDC).
IDC believes that the strongest growth for mPayments will be driven in part by rising levels of mCommerce as emerging nations come online for the first time and witness an internet boom via smartphones. Furthermore, the limited state of credit/debit card adoption in Asia/Pacific will force potential mPayments 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, Associate Research Director, and AP Connected Consumer Marketplaces 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.”
“When we look across the region, we see a duality between the mature Asian markets like Australia, Hong Kong, and Singapore versus the emerging Asian economies like China, India. and Indonesia”, continues Putcha.
The mature markets exhibit strong levels of banking and card adoption and will tread a similar path as mature Western economies have for mobile payments, with a focus on proximity solutions based on Near Field Communications (NFC). These will be fertile markets for solutions like Apple Pay and Android Pay.”
However, Asia’s emerging markets, which account for most of Asia’s population, are unlikely to follow this path. They will more likely leverage semi-closed wallets, where consumers “top-up” their mobile wallets much like they would a prepaid mobile account by linking their bank accounts.
According to Michael Yeo, Senior Analyst, IDC Retail Insights, “The markets of Asia/Pacific are highly diverse and each displays significantly different characteristics as relates to their ultimate potential for mobile payments.”