Smartphone Usage and NFC Drive Mobile Wallet Market Growth
Widespread smartphone use and technologies that enhance the customer experience, such as Near Field Communication, will fuel ongoing stable growth of the digital wallet market through at least 2024. That’s the bottom line from an industry report from Grand View Research.
The mobile wallet market has enjoyed rapid growth because it allows consumers to perform transactions and manage funds anytime and anywhere, all while supporting low fees and favorable prices. Recent years have seen substantive innovations from key players in the market. To stand out from the competition, mobile wallet companies have offered features such as mobile vouchers, digital charity schemes, and dynamic currency conversion.
Still, substantial barriers stand between the status quo and widespread adoption. Improvements in security and privacy need to be made, and there is still insufficient initiative and supervision by governments.
Proximity-based products will see the highest growth
Due to the rapid penetration of NFC-enabled smart devices, proximity-based products are expected to enjoy faster growth than remote products. Grand View says companies that offer the highest level of flexibility to customers will achieve the best results.
Mobile wallets have numerous applications in market segments such as retail, restaurant, public transportation, and vending machines. Grand View predicts that the retail segment will continue to dominate the business. Devices with NFC features provide better customer experience (fast, cashless transactions) as well as greater security, which will encourage both consumers and retailers to use the technology. Also, NFC reduces processing fees, improving costs and operational efficiency.
The Asia-Pacific region will have the largest market share
Grand View expects the Asia-Pacific region to generate the highest revenue compared to the other parts of the world.
In countries such as China, India and Indonesia, large numbers of people use vending machines. Also, these countries are seeing an increase in disposable income and consumer needs. All of these factors point to market growth. India's authorities are implementing economic and technical initiatives that have a positive effect on demand.
In Europe, restaurants and public transport will claim larger shares of the market.
Apple Inc. and American Express are major competitors in the mobile wallet market. They are investing heavily in R&D to gain a better market position. In addition to improving customer loyalty, mobile wallets provide better insights into consumers' habits and preferences, thanks to data collection.
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