There's an old adage that's usually used to, if somewhat snarkily, talk about government spending. It usually goes “a billion here, a billion there, pretty soon, you're talking about real money.” Attributed somewhat controversially to Everett Dirksen—Dirksen himself was said to remark that he'd never said the last part, but liked it so much that he “never bothered to deny it”--it's a great quote for showing the value of a dollar and how impressive things can get when “billions” start showing up. Trillions, of course, do even better, particularly in terms of talking about the size of an overall market, which is just what we can use when talking about the mobile wallet market worldwide.
Reports from Allied Market Research suggest that the global mobile wallet market is set to reach $5,250 billion—or $5.25 trillion—in 2020, with a compound annual growth rate (CAGR) of 127.5 percent over the next seven years alone. Driving this phenomenal growth rate, according to reports, is an increasing awareness of the usefulness of the mobile wallet and its various applications, along with increasing numbers of mobile wallet-capable mobile devices as well as improvements in security, making the mobile wallet not only easier to use and more useful, but also safer to use.
The report, titled “Mobile Wallet Market (Applications, Mode of Payment, Stakeholders and Geography) – Global Share, Size, Industry Analysis, Trends, Opportunities, Growth and Forecast, 2012 – 2020”, further went on to describe some key points about the mobile wallet market worldwide. Included in the report were projections that, while mobile commerce would be the clearest beneficiary of the mobile wallet uptrend, the fields of mobile money transfer and mobile ticketing would also have some skin in the proverbial game, so to speak. Expected to see the fastest growth, meanwhile, is the Asia-Pacific region, followed by the Europe, Middle East and Africa (EMEA) region. The EMEA growth will actually be at least somewhat driven by the growth in African countries, where there's very little in terms of regulation and monitoring for mobile payments. Asia-Pacific region countries are seeing a bit more reluctance to accept the mobile wallet system, meanwhile, and that's hampered growth a bit in the past. But pent-up demand coupled with improved systems may act to get the Asia-Pacific region in the swing of things at a much higher rate overall.
Still, many consumers prefer cash or credit card payments, likely taking a bit of refuge in familiarity and, from there, perceived safety. The mobile wallet concept is still young technology, and hasn't had the time to build the reputation that other payment methods have. But looking at the companies profiled in the Allied Market Research report—companies like Google, Samsung, Apple (News - Alert), American Express and several others—it's easy to see that mobile wallet technology will likely gain some significant ground. There's a lot of capital involved in the firms dealing with mobile wallets, and that means a lot at stake for said companies. These companies will in turn likely work hard to address misconceptions, improve security, and make the mobile wallet experience every bit as painless and ultimately familiar as cash and credit card transactions are today.
There's plenty of room to go yet before the mobile wallet takes the place of the real one, but with plenty of companies working toward that goal and gains made regularly, seeing $5 trillion by 2020 isn't a goal that's necessarily out of reach.
Edited by Cassandra Tucker
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