Htet Tayza discusses the release of new data, which suggests that the global mobile payments market will record significant growth volumes within the next five years.
Market intelligence provider Trendforce defines mobile payments as the “transfer of funds initiated using a mobile phone.” There is a growing market worldwide for mobile payments services. This diverse, competitive and technologically complex sector includes POS device companies, processor firms, network ventures, issuer businesses, applications companies and devices firms.
According to NFC World, an emerging technologies news portal, a study from Trendforce suggests that the global mobile payments industry has major potential. Trendforce predicted that mobile payments will grow by 37.8% year-on-year from 2015 to 2016, increasing from US$450bn to US$620bn. Trendforce estimated that payments would reach US$780bn in 2017, before vaulting to US$930bn in 2018 and $1.08tn in 2019, indicating that the market will expand significantly going forward.
This argument was recently supported by market research company Novonous in their most recent report, Global Mobile Payments Market 2016-2020. This paper serves as an extensive exploration of the industry’s potential during the next five years. Notably, Novonous found that the global mobile payments market will record a Compound Annual Growth Rate (CAGR) of 36.26% by 2020.
Novonous mainly attributed this growth to three factors. These were the availability of affordable mobile payments solution and services to end users, a rise in analytics services, and increasing penetration of mobile payments in a range of sectors worldwide. The company also named the main drivers which are set to accelerate global mobile payments expansion. These are increasing penetration levels, convenience of payment, large consumer reach and lower costs.
Novonous also broke the report’s result down by region. In terms of global mobile payments revenue, Novonous said that the Asia Pacific (APAC) region controls the largest market share. The company estimated that the APAC mobile payment industry will expand at a CAGR of 37.08% until 2020, possibly maintaining its leadership position beyond this date.
In terms of revenue, Novonous suggested that North America possess the second largest market share. The firm believes that the North American mobile payments sector will grow at a CAGR of 35.10% until 2020. Novonous named Europe the third largest market share holder by revenue, predicting that its mobile payments market will record a CAGR of 34.18% until 2020.
Htet Tayza’s analysis
It is clear to me that the global mobile payments market holds incredible potential. It is already worth billions of US dollars and experts are increasingly suggesting that it will be worth trillions of US dollars by 2020. Ultimately, I believe that this is because as technology advances, smartphones are becoming more readily available. Figures quoted by Tech Crunch suggest that in 2015, there were 2.6bn smartphone subscriptions globally, but that this will rise to 6.1bn by 2020.
As smartphones are becoming more readily available, consumers across a range of both well-developed and developing regions are using these devices to execute financial transactions more conveniently. A report from KPMG, a global accountancy services firm, suggests that the number of mobile banking users worldwide will increase from 0.8bn in 2014 to 1.8bn by 2020. As mobile penetration rates rise, more people worldwide will come to see the value in using smartphones to execute financial transactions, allowing the global mobile payments market to expand significantly from 2016 to 2020.