Mobile payments are fueling a lifestyle and eCommerce revolution – is your company ready?
Every day, shoppers around the world are choosing to pay for their items with mobile devices in their hands instead of the cash and credit cards in their wallets. This is all thanks to improved technology, better connectivity and superior all-around convenience. As such, local payments made via mobile devices are experiencing dramatic growth worldwide with no signs of slowing.
- Chinese payment app AliPay has over a billion users (eMarketer).
- By 2024, the predicted mobile payment market size is estimated to reach 3 trillion (EmizenTech)
- From 2020 to 2025, mobile payments use will continue to rise at 27% of CAGR (EmizenTech)
- Over 1/3 of the global population will adopt a mobile wallet by 2024 (The Paypers)
Sustained growth means that mobile-based payments aren’t just a fad or trend, they are a lifestyle and eCommerce revolution that merchants must harness to succeed.
The Mobile and Digital Payments Revolution Is Happening Now. Is Your Business Ready?
Table of Contents
Three Types of Mobile Payments Commonly Used by Global Consumers
Mobile Point of Sale
Growing in popularity around the world, mobile point of sale replaces a fixed POS terminal with a phone or tablet and uses special hardware to allow for payment via credit or debit card.
Remote Mobile Payments
Whether it’s on an app like Amazon or a website like Nike.com, you are conducting a remote mobile payment whenever you purchase something via your mobile device.
Mobile Proximity Payments
Similar to mobile point-of-sale, mobile proximity payments are any transactions that occur at a point of sale where shoppers use a mobile device to pay in place of credit cards or cash. These transactions are useful for stores to accept mobile payments.
However, mobile proximity payments are incredibly convenient for shoppers because they only require a simple wave, tap or scan of a QR code from a mobile device to complete payment. GrabPay and AliPay are popular digital wallets that enable mobile proximity payments.
Digital Wallets Are Replacing Traditional Ones
As more shoppers rely on their phones to make purchases, they are reaching into their wallets less often. With that trend comes the rise of digital wallets, a preferred local payment method for both remote mobile payments and mobile proximity payments.
Also known as ewallets, digital wallets securely store shoppers’ payment details like credit card or bank information from the convenience of their smartphone. Some ewallets can also be topped up via cash deposits at retail locations and kiosks, eliminating the need for a bank or credit card. This allows customers to easily make in-person cashless and cardless payments thanks to Near Field Communication technology (NFC) and Quick Response codes (QR codes).
- NFC Mobile Payments: Available in most smartphones today, NFC payments technology allows shoppers to simply scan, wave or tap their phone near the POS system to complete payment. The transaction is fast, contactless and uses a shopper’s digital wallet instead of cash, credit card or check.
- QR Codes: As an easily identifiable matrix barcode, QR codes allow shoppers to use their smartphone camera to quickly authenticate and authorize a payment from their digital wallet during a point of sale transaction. This technology is currently dominating payments in Asia and predictions for the future of mobile payments throughout the world, due to its low cost and widespread accessibility.
The Types of Mobile Payment Wallets
Just like regular wallets, mobile wallets come in all shapes and sizes, each boasting various features and reasons to use them. Today, there are two types of digital wallets growing in popularity across the world: closed-loop wallets and open-loop wallets
- Closed-Loop Wallet: Anyone who uses their Starbucks app to purchase their morning coffee is using a closed-loop wallet. Offered by retailers to increase loyalty, offer discounts and learn more about their shoppers, closed-loop wallets are a popular way to pay for items only at a particular store.
- Open-Loop Wallet: This type of digital wallet works more like a traditional wallet by storing bank and credit information and allowing shoppers to use it wherever it’s an accepted form of payment. GrabPay, Paytm and AliPay are all prevalent examples of digital wallet platforms.
List of Top Mobile Payment Apps by Region
Around the globe, there are hundreds of solutions to help consumers ease the payment process. Thanks to the ever-growing market, accepting mobile payments has never been easier no matter where you are.
Top Payment Apps in Asia
In Asia, AliPay and WeChat Pay lead the charge in payment technology. Together, they account for 90% of the mobile wallet market share in China, which highlights the dominance of these two many Asian markets (Asia Pacific Foundation). WeChat Pay boasts over 1 billion active users, while AliPay exceeds that amount at 1.3 billion active accounts.
In India, the Paytm ewallet processed over 1 billion monthly transactions and holds a greater customer base than credit cards (TechCrunch). The GrabPay superapp and Grab wallet are also widely used in Southeast Asian areas, including Indonesia, Malaysia, Singapore and Thailand.
Top Payment Apps in the Americas
In the Americas, competition for the top payment app is more fiercely contested. It’s no secret that Paypal is an established payment app, with over 360 million users worldwide. However, Apple Pay and Google Pay are also incredibly popular mobile payment apps in North America. Latin America is the fastest-growing region for mobile payments, and Paypal’s reach in this region doesn’t match up to its US and Canadian success. Mercado Pago and PagSeguro are some of the most beloved payment apps in the region, largely due to their affordable fees.
Top Payment Apps in Europe, Middle East and Africa
In Europe, the Middle East and Africa mobile payments users have a varied range of opinions by country, with no standout winner in terms of payment app popularity. In Europe, Swedes prefer to opt for Buy Now, Pay Later app Klarna, whereas Russians prefer Yoomoney and most Germans use Paypal.
The Middle East bucks many of the payment trends seen elsewhere. Despite widespread smartphone usage of 80-90%, this area has been slower to adopt mobile payment methods, with cash largely remaining on top. However, digital payments increased during the pandemic, and Paypal and Samsung Pay and local payment apps like Careem Pay have gained in popularity (Mordor Intelligence).
M-PESA is Africa’s premier payment service in Africa, with over 51 million users across 7 countries (Vodaphone). Still, emerging options such as Samsung Pay are also gaining ground with 3 million transactions in South Africa (Samsung Newsroom).
Implementing Mobile Solutions for Payment Increases Conversion Rates
Although mobile payments are the most common method for transactions around the world, research indicates that checkout abandonment rates are twice as likely to occur from a mobile shopper than a desktop shopper, which is why it’s critical you get mobile payments right (Montate). By integrating with a mobile payment gateway that accepts payments like local digital wallets, you’re offering shoppers a fast, familiar, and convenient payment methods they know and trust.
Merchants Must Adopt Mobile Payments or Be Left Behind
While it is likely that cash will not disappear completely for 25 years or more, our transition towards a cashless society has only been expedited, with some countries now having only minimal cash usage. Physical card payments are likely to lose significant ground to mobile and digital payments over the next ten years (Gartner). Shoppers no longer need to carry around a physical purse or wallet when their smartphone can unlock all their payment needs.
By 2027, experts predict the digital payments market to increase in value to almost $13 trillion, and mobile payments are set to be a key part of this revolution. By offering mobile-friendly digital wallet payment options alongside card acceptance in both your point of sale and ecommerce checkout, your company can stay ahead of the curve today and well into the future.
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- Stat Investor. “U.S. Mobile Retail Commerce Sales as Percentage of Retail E-Commerce Sales From 2017 to 2021,” https://statinvestor.com/data/7485/us-mobile-retail-commerce-share/
- eMarketer via Statista. Digital E-Commerce Is Up and Poised for Further Growth https://www.statista.com/chart/13139/estimated-worldwide-mobile-e-commerce-sales
- Gartner. The Future of Commerce Payments in a Digital Society https://www.gartner.com/en/documents/3956560
- Pew Research Center. Fact Sheet https://www.pewresearch.org/internet/fact-sheet/mobile/
- Mordor Intelligence. Industry Reports: Digital Payments Market. https://www.mordorintelligence.com/industry-reports/digital-payments-market
- Executive Alliance. Value of Trust in SMB Success https://executivealliance.org/2021/11/17/8-statistics-showing-the-value-of-trust-to-small-business-success/
- Vodaphone. What We Do – M-PESA https://www.vodafone.com/about-vodafone/what-we-do/consumer-products-and-services/m-pesa
- TechCrunch. Paytm Claims Top Spot India Payments https://techcrunch.com/2021/03/01/paytm-claims-top-spot-in-india-mobile-payments-market-with-1-2-billion-monthly-transactions/
- Samsung Newsroom https://news.samsung.com/za/how-south-africans-are-driving-the-growth-of-samsung-pay-during-lockdown
- Mordor Intelligence. Industry Reports: Middle East and North Africa Payments https://www.mordorintelligence.com/industry-reports/middle-east-and-north-africa-digital-payments-market
- Paypers. 13% of Global Population Adopt Digital Wallet. https://thepaypers.com/mobile-payments/study-over-13-of-global-population-to-adopt-mobile-wallets-by-2024–1255370
- Emizentech. Payment Statistics & Facts 2022 for Marketers. https://www.emizentech.com/blog/mobile-payment-statistics-facts.html
- Asian Pacific Foundation of Canada. https://www.asiapacific.ca/sites/default/files/publication-pdf/mobile_payment_report.pdf