A new study from Juniper Research has found that the number of mobile wallets using contactless technology is expected to reach 200 million by the end of 2016, representing growth of more than 100 percent from the end of 2014.
Juniper’s research found that while historic growth of mobile wallet use was driven by person-to-person services for the unbanked in developing markets, the launch of Apple Pay has prompted a hive of activity in the contactless arena. The report argues 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.
Additionally, the research, “Mobile Wallets: Contactless & Remote Payments 2015-2020,” found that numerous banks were partnering with Visa or MasterCard to implement their own contactless wallets using a cloud-based secure element.
The report also touches on the troubles associated with the Merchant Customer Exchange and the delayed launch of its own contactless service, CurrentC. Dr. Windsor Holden, the report’s author, noted how several MCX partners are now supporting Apple Pay. Holden also noted MCX has not agreed terms with any leading card holders, citing the high transaction fees as a stumbling block.
“By the time MCX launches, U.S. 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,” Holden said. “In addition, the reliance on store brand payment cards could ultimately be a fatal flaw for the service.”
Other key findings from the report include:
- Wallets run by mobile operator consortia continue to fare badly, with the U.K.’s Weve dropping its planned wallet, and Softcard folding in the U.S.
- In developing markets, there has been a significant upscaling of wallet usage for savings and loan disbursements, while more than 100 million are now in use for micro-insurance.