Global Mobile Payment Snapshot 2014

There are only 1.3 billion active credit and debit accounts globally, but considering that there are more than 5 billion active mobile phone accounts, there is potential for widespread application of mobile payments, according to Omlis, a global mobile payments solutions provider.

By the end of 2013, there were about 245 million mobile payment users, and Juniper Research predicts this will almost double within the next three years up to 450 million mobile payment consumers by 2017. In terms of M-commerce value, Gartner predicts that total mobile payment transactions are expected to reach $507 billion in 2014. The global adoption of mobile payments is on an upward curve, but traction is dependent on consumer access to technologies, varying lifestyle choices, and economic factors.

Africa currently holds the top place for mobile payment usage worldwide, according to Gartner, encompassing 52 percent of all global mobile money services. Over half of cell phone users regularly make mobile payments in Kenya and Uganda, with a quarter of users doing so in South Africa and Senegal.

92 percent of Kenyans say they have used mobile P2P payments via the M-Pesa mobile payment system, which sends money via SMS message according to a report from BI Intelligence. 73 percent of those users say they utilize the system at least once a day. In 2013, there were 163 different mobile payments products operating in developing economies, 90 of which were in Africa, followed by 40 in Asia-Pacific, and 17 in the Americas.

Mobile is dominantly used as a retail shopping channel in the Asia Pacific region, where 32 percent of consumers shop for goods with their mobile phones as opposed to only 21 percent shopping on PCs. With a higher adoption than North America or Western Europe, the Asian market accounted for about $74 billion in M-Payments in 2013.

Japan’s dominant mobile payment provider, Osaifu-Keitai, or “Wallet Mobile” is largely used for purchasing tickets and reward schemes. Mobile banking is an expansive market in this populous region, and Gartner forecasts that the Far East and China will make up the largest portion of mobile banking users by 2019. Peer-to-peer (P2P) payments have also been largely adopted in India, where a large proportion of users send money to friends or family members via mobile.

Latin America is another vastly expanding market, where it has been predicted that there will be 22.31 million mobile payment users by 2016. Brazil, Mexico and Chile currently hold the highest M-Commerce adoption rates in Latin America, at about 30 percent adoption according to Ericsson Consumerlabs.

These largely unbanked populations currently rely on a secure SMS payments-based system for exchanging money. Contrastingly, almost half of mobile wallet users in the US use P2P payments in leisure settings, and especially while dining in order to split the check. North American mobile transactions have almost doubled since last year, now accounting for 17 percent of transactions made, with a total of about $37 billion in 2013 according to Pew.

“Differentiation in global mobile payment trends demonstrates the immense opportunities for organizations involved in the mobile payments space,” says Omlis CEO Markus Milsted adding that “the predictions for growth signals that this is an industry that will see immense changes as contrasting markets expand upon current practices and usage.”

Europe has also witnessed a significant number of mobile payment transactions, with 12.4 percent of transactions originating from mobile devices. Most of these payments are in the travel, ticketing, digital goods, or retail industries. Dominant markets include UK, Germany, and Spain, where over half of people have reportedly made a purchase via their mobile phone according to a report from the Future Foundation. Sweden boasts a robust mobile payment infrastructure, backed by its high internet penetration with 94 percent of citizens having internet access via mobile.

Throughout Western Europe in general, consumers transacted about $29 billion in M-commerce in 2013 according to Gartner. Pew reported that Russia had the highest reported amount of mobile payments outside of Africa in 2013, with 24 percent of cell owners who claimed to regularly use a device for making payments.

Mobile payments have shown accelerated growth in Australia, where contactless payments via NFC increased last year from 10 to 60 percent of transactions in 2013, due to all major Australian banks adopting the technology. Predictions from the RBA say that Australians will make an average of five contactless mobile payments per month in 2015 due to growing use of NFC terminals.

(Abstracted from The Global Mobile Payment Snapshot 2014 by Omlis, a global mobile payment solutions provider)