The long anticipated surge in mobile wallet usage seems to be underway, as more consumers are reaching for their phones instead of their wallets to make payments. The question is, which card is in the ‘top of wallet’ position? And how can they stay there?
Contactless payments will exceed $1 trillion for the first time in 2018, according to a report from Juniper Research. By 2020, in-store contactless payments are expected to reach $2 trillion, or 15% of all point-of-sale transactions. Of this $2 trillion, 15% ($3 billion) will be enabled by mobile device providers such as ApplePay, Samsung Pay and Google Pay according to the report, Contactless Payments: Payment Cards, OEM Pay & Mobile Wallets 2018–2023.
Combined, these mobile wallets users will reach 450 million by 2020, with Apple Pay leading this surge, accounting for 50% of original equipment manufacturer (OEM) wallet payments, as opposed to a third-party app.
“We believe that growth over the next five years will continue to be dominated by offerings from the major OEM players,” said the research’s author Nitin Bhas. “Additionally, we now have the likes of Huawei Pay and Fitbit Pay launching in several markets.”
Beginning of a Trend?
Over the last half dozen years, consumers have had a number of digital and mobile wallet options presented to them to change longstanding payment habits. These include mobile wallets from financial institutions, retailers such as Starbucks, and mobile manufacturers.
But expanded options haven’t automatically led to increases in mobile wallet use. In fact, while in-app and P2P payments have skyrocketed, most mobile wallets have not gained momentum … until recently.