The number of mobile wallets using contactless technology is expected to reach 200 million by the end of 2016, representing growth of 100% since 2014, thanks to popular services such as Apple Pay boosting awareness.
This is according to a new study by Juniper Research. The research found that while historic growth of mobile wallet usage was driven by P2P (Person to Person) services for the unbanked in developing markets, the launch of Apple Pay has prompted a hive of activity in the contactless arena.
It argued that with public awareness of contactless heightened in the wake of Apple’s launch, competing services such as Samsung Pay and the forthcoming Android Pay would no longer need to seed the market.
Additionally, the research found that numerous banks were partnering with Visa or MasterCard to implement own-brand contactless wallets using a cloud-based secure element.
Other findings show in developing markets there has been a significant upscaling of wallet usage for savings and loan disbursements, while more than 100 million are now in use for micro-insurance.
However, the research observed that the MCX (Merchant Customer Exchange) Consortium in the US had postponed the launch of its own contactless service, with several retailer partners now abandoning their ‘closed shop’ stance towards Apple Pay.
Furthermore, the Consortium has not agreed terms with any leading card holders, citing the high transaction fees as a stumbling block.
According to research author Dr Windsor Holden, “By the time MCX launches, US consumers will have a choice of perhaps half a dozen other mobile wallet solutions, not to mention the fact that an increasing number will also have contactless payment cards.
"In addition, the reliance on store brand payment cards could ultimately be a fatal flaw for the service.”