While the launch of Apple Pay, Samsung Pay and Android Pay have attracted most attention from the media, the real growth in the mobile payments industry in 2015 has come from elsewhere.
The entry of technology giants such as Apple, Samsung and Google to the mobile payments market has reignited the debate on the future of mobile payments. So far, however, the three companies have failed to reshape the payments industry.
New research from Timetric finds that transaction value on the aforementioned mobile payment solutions is still relatively small. “For comparison, the value of Apple Pay transactions in 2015 was lower than the value of transactions on Kenyan M-Pesa,” says Vladimir Vukicevic, lead analyst at Timetric’s Cards & Payments Intelligence Centre.
“Two Chinese payment solutions, Alipay and Tenpay, dominate the global mobile payments market in terms of value of transactions. PayPal is, however, the leader in mobile payments in markets outside China,” continues Vukicevic.
The research finds that Barclays’ Pingit and other bank-led solutions continue to compete with the global players at national level. According to Vukicevic: “They benefit from strong financial links with broad customer bases, brand strength and their links with large merchants. The introduction of mobile wallets, tokenization and host card emulation technology have given banks secure and flexible mechanisms to offer mobile payments, especially in-store.”
Developments such as integration of payments into products offered by consumer technology companies and expansion of contactless technology are encouraging growth of in-store mobile payments. At the same time, emergence of one touch checkout buttons (PayPal, Amazon Pay, Visa Checkout, etc.), peer-to-peer payments such as Pingit and Paym as well as the rise of sharing economies (Uber, Airbnb, etc.) have created new market opportunities for remote mobile payments.
“Going forward, mobile payment solutions that manage to provide modularity, interoperability across platforms and backing for multiple smart device manufacturers will most likely grow their market shares,” says Vukicevic.
“Coordination between major stakeholders in the industry, including card networks, phone manufacturers, card issuers, merchant acquirers, payment processors and mobile carriers, will also play a major role in shaping the future prospects for the industry,” he adds.
The latest research from Timetric finds, however, that Apple Pay and Android Pay are in a good position to become the market leaders for in-store mobile payments. On the other hand, Alipay and PayPal are likely to remain leaders in remote mobile payments in the very near future. They are also expected to become serious contenders for in-store payments.
