The mobile payment market worldwide continued rapid growth in 2014, according to a new report by Hamburg based secondary research company yStats.com. The publication, „Global Mobile Payment Methods 2014“ discloses that while competition in the mobile payments field has intensified worldwide, acceptance and usage of in-store mobile payments and the preferences of shoppers towards payment methods in remote M-Commerce differed from country to country. A general trend is the lingering concern of consumers towards security of mobile payment transactions.
Mobile payments, comprising remote and in person retail payments made with mobile devices, are forecasted to maintain rapid growth in the next several years. The number of mobile payment transactions is forecasted to near 50 billion in 2015. Contactless mobile payment transactions and mobile wallets are expected to be the leading segments in terms of market growth.
International and local banks, card companies, mobile operators, electronics manufacturers and payment processors are competing and forming alliances to grab a share of the booming market, launching their own mobile payment offerings throughout the world. In 2014, while both Visa and MasterCard added cloud-based solutions to their mobile payment services, PayPal launched a new marketing campaign for its mobile wallet and Google announced that its Google Wallet ambitions go beyond the contactless payments frame. Apple released the Apple Pay mobile payment service, which is expected to drive consumers to wider usage of in-store mobile payments.
In practice, both merchant acceptance rates and consumer usage of mobile payments vary widely between the regions and countries worldwide. In China and South Korea, the share of consumers who already have experience with mobile payments in-store or online is more than double of that of the USA or Canada in 2014. In China, third-party mobile payments surged by eight times last year and are forecasted to more than double this year as well. In this vastly populated country, more than 200 million people already use mobile payments. Also in the USA mobile payments are growing at three-digit percentage rates.
Meanwhile, in the Middle East and Africa, the share of mobile payments in B2C E-Commerce was the highest in the past years, boosted by low financial services penetration in contrast to fast spreading mobile phone penetration. In Kenya, which is home to the M-Pesa mobile payment and transfer solution, there were over 25 million subscribers to mobile payment services in 2014, accounting for more than half of the country’s total population. Meanwhile, Europe showed different levels of contactless mobile payment acceptance in retail as well as variation in methods preferred in mobile commerce, such as cards, transfers and wallet services.
However, regardless of acceptance levels, security concerns about mobile payments are a general trend. Over 70% of people in China already using mobile payments said security is most important to them, while in the USA merchants trading through M-Commerce report the highest rate of revenue losses to fraud compared to other channels. Similarly, consumers surveyed in other countries across the globe, such as Germany, Brazil and South Africa, reported security of payment transaction and personal data to be the leading factors for them in mobile payments.