The number of mobile wallets using contactless technology is expected to reach 200 million by the end of 2016, according to new statistics from Juniper Research.
This would represent growth of more than 100% from the end of 2014, boosted in
part by the introduction of Apple Pay. The Juniper study found that while the growth of mobile wallet usage had historically been driven by person to person (P2P) services for the unbanked in developing markets, the launch of Apple Pay had prompted a hive of activity in the contactless arena.
The report, Mobile Wallets: Contactless & Remote Payments 2015-2020, argued that with public awareness of contactless heightened in the wake of Apple’s launch, competing services such as Samsung Pay and the forthcoming Android Pay would no longer need to seed the market. It also pointed out that numerous banks were partnering with Visa or MasterCard to implement own-brand contactless wallets using a cloud-based secure element.
However, the paper also observed that wallets run by mobile operator consortia were faring badly, with the UK’s Weve dropping its planned wallet, and Softcard folding in the US. The MCX (Merchant Customer Exchange) Consortium in the States has also postponed the launch of its own contactless service, with several retail partners now abandoning their ‘closed shop’ stance towards Apple Pay. Furthermore, the consortium has not agreed terms with any leading card holders, citing the high transaction fees as a stumbling block.
Research author Dr Windsor Holden said: “By the time MCX launches, US consumers will have a choice of perhaps half a dozen other mobile wallet solutions, not to mention the fact that an increasing number will also have contactless payment cards. In addition, the reliance on store brand payment cards could ultimately be a fatal flaw for the service.”