According to the latest study released by Technavio (www.technavio.com), the global mobile wallet market is expected to grow at a CAGR of more than 35% during the forecast period.
The application of mobile wallets in retail stores increased rapidly in 2015-2016 as they reduce the operational costs for retailers and increase their revenue. The processing fee for transacting via mobile wallets is much lower than card-based transactions. In addition, mobile wallets used in retail stores offer customers with benefits such as coupons and loyalty points. They allow vendors to easily track and analyze consumer data. Retailers use this information to understand consumers’ demands and give consumers a better shopping experience.
Mobile wallets act as a bridge between the online and physical world. It helps users to improve their purchase decision-making process by giving them an opportunity to compare various products and read reviews simultaneously. It allows retailers to change their offerings based on a customer’s location, loyalty, purchase history, transactions, and preferences.
According to Ujjwal Doshi, a lead analyst at Technavio for Internet and e-commerce research, “An effective mobile wallet strategy, which includes in-app mobile purchases as well as in-store purchases, is critical for businesses across different categories as it enables consumers to modify their mobile wallet properties according to the retail stores they visit.”
Mobile service providers worldwide are focusing on using advanced technologies such as mobile wallets to make the payment for transportation more user-friendly and efficient. In 2015, Gemalto, a mobile network provider in Spain, partnered with the Madrid transportation system to provide travelers with the option of contactless payments through NFC-enabled smartphones. Similarly, HopOn, a mobile ticketing app for public transportation allows travelers to buy tickets directly using the mobile app.
The market is likely to grow at a CAGR of 35.50% during the forecast period. An increasing number of people visiting restaurants prefer to pay using mobile wallets as it eliminates the need to carry physical wallets and cash, enabling hassle-free payments. Paying via mobile wallets helps users to track their spending history and helps vendors understand customers’ buying behavior. In addition, mobile wallets in partnership with restaurants and hotels provide discount coupons and offers to customers that make payments via mobile wallets.
The global mobile wallet market by grocery stores is expected to grow at a very impressive CAGR of more than 46% during the forecast period. In 2015, in India, Aditya Birla Group’s food and grocery retail arm partnered with Paytm to allow shoppers to pay bills using the Paytm mobile wallet.
“The percentage of population carrying physical money or cards has reduced with the increase in adoption of mobile wallets and rise in number of NFC mobile transactions. This has encouraged retailers to partner with mobile wallet providers,” says Ujjwal.