Increasing penetration of smartphones worldwide has led to the rise in payment transactions using mobile phones. Faster transaction and ease of use of applications are creating a positive impact on mobile payment transactions. Technologies such as mobile applications and mobile wallets are playing a major role in driving the demand for the mobile payment transaction. With major companies entering the e-commerce industry, mobile payment solutions have become available to customers including Android Pay, Apple Pay, etc.
According to the report by Future Market Insights (FMI), the mobile payment market is expected to increase to 39.2% CAGR during 2014-2020, reaching $2849 billion market value by 2020. Increasing focus on shifting from traditional payment method to mPayment and comfort of using smartphone applications is driving the growth of mobile payment transaction market.
Emerging technologies will revolutionize mobile payment transactions
mPayment technology is set to become a standard method of payment. Moreover, customers are using mobile devices to make payments at physical stores. Meanwhile, businesses are also encouraging mPayments by installing Near Field Communication (NFC)-enabled terminals at their stores.
Mobile payment solution providers are also planning to use biometrics in order to provide secure transaction and contain fraud. Biometric authentication uses fingerprint scanning, voice, facial recognition, etc., to validate the transaction. Hence, biometric authentication will become a common feature in the near future.
Virtual currencies such as Bitcoin is becoming popular and there will be a growth of blockchain and cryptocurrency use within mobile payments. For example, Burger King is planning to enable Bitcoin payment in Russia. However, Burger King will face some tax issues as Bitcoin and other cryptocurrencies are not legal in Russia.
Visa partners with Interswitch to accelerate mobile payments
Visa has announced a partnership with Interswitch, payment and transaction solutions company in Africa. Visa and Interswitch will upgrade banking applications of leading banks to include mVisa, enabling merchants to accept payments via mVisa. Both the companies will work together across selected markets in East and West Africa to build a merchant management platform to receive OCT from Visa and merchant enrollment solutions based on the app. With this, customers will have an option to make payment with mVisa.
China is also expected to witness a huge demand for mobile payment services by customers. Moreover, mobile payment has increased in China with WeChat and AliPay dominating the mobile payment market. While APAC is expected to register 22% CAGR by 2020, as in 2014 it had maximum number of mobile payment users. Based on technology, NFC is expected to witness the highest growth rate of approx. 46% by 2020. While WAP/WEB technology is projected to hold more than 40% of total market share. Moreover, simple and easy to use interface by the major players is increasing the mobile payment users worldwide.