From barter to paper money, the money market is likely to undergo another change – one where the entire globe might operate cashlessly. Like the rapid forest fire, the world is catching on digitalization. Digitalization is expanding the market for the mobile phone, especially smartphones; so much so that the number of mobile connections is more than the number of people inhabiting this planet. With the given back-to-back technological revolutions, expanding market size for mobile connections as well as the growth of a generation that is more accepting and open to trying out and adopting these newer changes, digitalization is bringing about significant transformations in the ways of daily monetary transactions.
Payments transactions using the smartphone platform has undergone brilliant growth, establishing a whopping 600 billion dollars global mobile payment market in 2017 and is expected to grow at 33.8% of CAGR by 2023.
Dissecting the Mobile Payments Market
This market has been categorized on the basis of:
- Transaction Mode: Comprising of WAP (Wireless Application Protocol), near-field communication and SMS (Short Service Message). SMS is the most preferred mode in this category since a small text message can help the consumer have his or her purchase added to his or her monthly account or subtract from the existing prepaid balance with the relevant phone operator.
- Mobile Payments Type: It comprises of mobile money and mobile wallet (including bank cards). Although, the latter might be easily expected to have a robust growth over the years to come, owing to the rising awareness about them through Paytm and Google Wallet, yet, the current scenario depicts the domination of the former.
- Application-based: Different segments of a never-ending market, these days, demand the use of mobile payment. Thus, the payment method is applied in the retail, transportation, hospitality, entertainment, healthcare, energy and utilities and various other sectors. The hospitality and transportation sectors will be soon competing with the retail sector due to the introduction of numerous smartphone applications of hotel booking and renting cars.
- Region-wise: As per reports, Asia-Pacific has been noted to account for the largest market share in mobile payment in 2016, followed by North America, Europe, and LAMEA.a
The soaring figures in the market share for Asia Pacific mobile payment market is due to a number of trends like technological advancements, and scientific developments. These trends include:
Younger Generations: Forthcoming, Modern, and Experimental
Today’s youth are more adventurous in experimenting with newer technology; they actively look forward to accepting the convenience and goodness of any recent developments. Hence, embracing mobile wallet payments was a no-brainer, especially since it offers to make the fast-moving lives a bit simpler.
Increasing Smartphones Penetration: Boom in the Mobile Commerce
Advancing technology generates affordability among the masses by making commodities cheaper and thereby, increases the number of smartphone users in the market. This growing number of smartphone users coupled with improved connectivity and internet has led to a brilliant rise in the mobile commerce. Consumers opt for online shopping for books, apparels, make-up, electronics, furniture and even food. Every day changing lucrative offers and discounts drive the consumers to purchase online even more.
The Comfort of Paying Bills from Anywhere
Through varied mobile payment methods, transferring money along with payment of utility bills, loans, insurance can be done on the go or from homes at an individual’s leisure. This bids goodbye to the utterly long queues and mismanagement of the staff at the payment section.
Other key points that stand out for the growing mobile payments market network include:
- Transparency in transactions through mobile payment set-ups gains the confidence of otherwise hesitant buyer.
- The ease of connecting a bank account to the mobile wallets grants fast and hassle-free monetary transactions.
- Encryption and security at its best ensure users their transactions would be free of any external hacks or leak of crucial personal details.
- Relief from carrying heavy liquid cash all around for any transaction.
As the fame of mobile payments system rises among the common people, it is only customary for every e-retailer of any trade to implement the needful set-up such that they do not lose out any customer. Then again, with different companies coming up with better versions of mobile payments to increase their profits, the consumers are drawn in automatically to use the secure mode of payment. Also, escalating government policies in numerous countries in favor of a cashless economy only supports the mobile payments market globally.
Author: Jay Karia
Digital Marketing Executive at Inkwood Research.