A report published today by Juniper Research shows that one in five of all mobile phones will have mobile wallet functionality by 2018. That compares with less than 10% at the end of last year.
It says this growth will be driven by two distinct financial models.
Stored Value Accounts (SVAs) - usually linked to the user’s mobile number - are enabling unbanked individuals in emerging and developing markets to enjoy access to financial services, with a surge in deployments expected across sub-Saharan Africa, developing Asia and Latin America.
Devices with contactless payment functionality are expected to become increasingly popular in North America and Western Europe. Over 50% of wallets in developed markets - and more than 1 in 3 mobile wallets worldwide - are predicted to feature contactless payments. Key events are likely to be the launch of an Apple iWallet and the growth of NFC services using HCE (Host Card Emulation).
High-profile person-to-person payment schemes will also boost the appeal of mobile wallets, with initiatives such as the UK’s Paym and start-ups including Venmo and Dwolla in the USA.
Dr Windsor Holden, research director at Juniper Research and the author of the report, said “While P2P mobile payment services have struggled to gain traction in developed markets, financial institutions are keen to commit to them as they can serve as an attractive value-add to consumers in an increasingly cashless society.”