Mobile payments are predicted to rise to $1 trillion in 2017, boosted by significant growth in the Asia/Pacific economies, according to a new report by the International Data Corporation (IDC).
These markets will grow rapidly as mobile commerce innovation increases in the region, which is expected to lead the world in mobile payment developments. A low adoption of credit and debit cards in these markets will also encourage a shift towards the use of mobile wallets.
The market intelligence specialist expects the greatest growth in developing countries, as they increasingly gain online access through smart phones.
IDC has grouped countries into three catgeories: ‘card payment leaders’, ‘mobile payment leaders’, and ‘mobile money leaders’. It speculates that mature Asian markets will still lead the way in card payments, making use of near field communication (NFC) technology to replace swiping cards.
Other Asian economies will reportedly view mobile payments as a way to improve GDP and it’s predicted mobile payments could boost mobile commerce in these countries in the way that Alibaba did in China.
The report highlights numerous opportunities for growth in the Asia/Pacific region – with the exception of Japan – saying that mobile-based NFC solutions will contribute significantly in a number of mature Asian markets.
Limited adoption of compatible phones and readers in emerging Asian economies means they will not follow suit and will instead see growth in the use of mobile wallets on semi-closed platforms.
Shiv Putcha, associate research director at IDC Asia/Pacific, said: “Smartphone adoption has grown much more rapidly than general banking and card adoption in the Asia/Pacific region. Recent focus on financial inclusion policies in various countries has given a boost to connecting the unbanked.
“This phenomenon, coupled with the innovation of semi-closed wallet schemes linked to bank accounts, has given a major boost to mobile payments in Asia-Pacific. When we look across the region, we see a duality between the mature Asian markets like Australia, Hong Kong, and Singapore versus the emerging Asian economies like China, India and Indonesia.
“The mature markets exhibit strong levels of banking and card adoption and will tread a similar path as mature Western economies have for mobile payments, with a focus on proximity solutions based on Near Field Communications (NFC). These will be fertile markets for solutions like Apple Pay and Android Pay.”
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