The number of mobile wallets using contactless technology is expected to reach 200 million by the end of 2016, says a study from Juniper Research titled ‘Mobile Wallets: Contactless & Remote Payments 2015-2020’. If occurs, this is a 100 percent growth from the end of 2014.
The reason for this growth is attributed to P2P (Person to Person) services for the unbanked in developing markets, particularly the launch of Apple Pay that promoted contactless payments. The popularity created by Apple Pay encouraged numerous banks to partner with Visa or MasterCard to implement own-brand contactless wallets using a cloud-based technology.
However, Merchant Customer Exchange Consortium (MCX) is yet to launch its own contactless service. It has also not agreed terms with any leading card holders, citing the high transaction fees as a stumbling block.
“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,” says research author Dr. Windsor Holden.
The research has also found that the developing markets show a surge in wallet usage for savings and loan disbursements, while more than 100 million are now in use for micro-insurance.