Apple Pay will boost awareness of contactless payments so much that the number of mobile wallets using contactless technology is expected to reach 200 million by the end of 2016, the latest study by Juniper Research claims.
If this prediction is borne out, it will represent growth of more than 100% in the number of mobile wallets using near field communication (NFC) since the end of 2014.
A new direction for mobile
The report – Mobile Wallets: Contactless & Remote Payments 2015-2020 – found this surge in contactless payments is a change in growth for mobile wallets, which had previously been driven by P2P (Person to Person) services for the unbanked in developing markets.
Research author Dr Windsor Holden asserts that the growing popularity of contactless payments fostered by the introduction of Apple Pay will offer a boost in adoption of rival services such as Samsung Pay and Android Pay when they are launched.
This report comes hot on the heels of research revealed on Payment Eye last month, showing the high adoption of Apple Pay by Apple Watch users – 78 per cent are using the service on their watch on a weekly basis.
Another key finding of the research was the number of banks partnering with Visa or Mastercard to create branded contactless wallets with cloud-based security.
On a less positive note, the report observed that the MCX (Merchant Customer Exchange) Consortium had postponed the launch of its own contactless service, after a number of retail partners performed a u-turn on their ‘closed shop’ attitude towards Apple Pay.
MCX could face further problems because it has not agreed terms with any leading card holders, saying the high transaction fees have stalled discussions.
Commenting on the progress of the consortium’s contactless service, Dr Holden said: “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.”
Australian Apple not yet ripe
The progress of Apple Pay has not been entirely without obstacles itself. A tug of war over fees with Australian banks could cause problems with the app’s launch in that country.
Added to the impasse on fees, the tech giant could struggle to assert itself in a more mature mobile payment market, such as Australia.
Ian Narev, chief executive of the Commonwealth Bank of Australia, said: “By most global standards, the capability that the Australian banking sector has generally, and Commonwealth Bank has specifically, to provide for customers is ahead of a lot of the other markets around the world where Apple has done well.
“There is functionality associated with Apple Pay that we have had in the market for 18 months to two years.”
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