Mobile payments offer variety of benefits, it improves convenience for customers, reduce collection process and collection errors. Consumers are beginning to see the advantage of mobile payments rather than carrying clunky coins and cash even plastic money and want to go wallet free so the mobile payment companies are being stressed to formulate new, more aggressive and dynamic strategies to sustain and for growth in quickly changing payment market. The mobile payment market is expected to grow at a CAGR of 40% during the forecast period of 2022-2030. Banks still dominate the payment market but the limitations they possess such as availability of branches and strict norms, makes them difficult to gain acceptance from everyone. The limited footprint of traditional brick-and-mortar branches, the high cost of expanding existing infrastructure and a lack of disposable income available for basic utilities, such as banking services, are foremost among the many reasons for the lack of banking services in developing countries.
The market is segmented on the basis of applications. Mobile person to person transfer has the highest markets share in 2021. The market is driven by increase in number of cashless transfers using debit and credit cards and ease of use compared to normal banking processes. Mobile wallet and mobile commerce are also gaining popularity due to rise of easy to use mobile apps. Closed loop payments are expected to grow at the fastest paceduring the forecast period of 2022-2030. The market is driven by banks developing their own apps and providing on the go services for the customers.
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P2P transfers continue to dominate the market in terms of revenue with over 70% share in 2022 and is expected to grow at a CAGR of 38.7% during the forecast period 2022-2030. Mobile P2P transfer is sending/ receiving money domestically or internationally over a mobile phone. Mobile P2P transfer service works on SMS based model where money is transferred via SMS. Mobile P2P is dominant player in African and Asian countries such as Kenya, Tanzania, Rwanda, Philippines and Vietnam etc. Prominent mobile P2P players are Vodafone M-Pesa, Airtel Money and GCash.Online technology that allow to transfer fund of customer from bank account or credit card to other account through internet or mobile phone is known as P2P (Person-to-Person) payment.
Closed loop payments is expected to grow at the fastest rate 72.8% during the forecast period, 2022-2030. Closed loop payments are a type of mobile payments when companies create their own mobile payment system which can be used only for making transactions at its store. Closed loop mobile payment solutions enable customers to manage their gift card or payment account via their mobile devices. Customers can check their balances, add money, and pay using a mobile application rather than a physical card. In a common way, closed loop cellular payments are those that enable purchasers to load money into a spending account that’s linked to a fee device – for instance, a reward card for a particular enterprise.Closed loop cell cost options enable buyers to control their present card or payment account by way of their mobile devices. Consumers can check their balances, add money, and pay making use of a cellular application instead than a card. Closed loop cellular payments systems can advantage each consumer and merchants alike, which is why many companies have no longer only opted to enforce them, but have also visible them succeed.
Developing countries are major contributor towards this growth led by China. E-commerce world has entered into new segments from bus ticket booking to utility bill payments. Most often payments in e-commerce are cashless (except country like India) which means that they must be processed by electronic means which is raising the demand of mobile payments mechanism. As per the chart the e-commerce sale in United States is increasing every year and eating the market of retail sales.Significant growth in e-commerce through online businesses such as online retail shopping, recharges, money transfer, and gas refill and so on is giving rise to mobile payment. Online world is rapidly expanding due to factors like rising number of broadband connections and availability of internet network, e-commerce gives shoppers’ convenience to shop from any location at any time, the physical distance between the buyer and the seller is removed. E-commerce has spread to developing countries like India, China, Nigeria, Kenya and Bangladesh where large number of urban as well as rural population shops online. All online shoppers do not have internet banking or Credit/debit card as a means of paying online this is raising the demand of alternate payment methods like mobile payments.
Partnerships are key strategy of mobile payment companies as many players cater to a particular geography. To attain geographical expansion and to compete with key players of mobile payment system, companies are expanding their presence by forming partnering with other companies of electronic payment system. Partnership enables the market participants to enhance market shares and remain relevant and capture local market with a regional player. Key players in the market include American express company, Apple Inc., Google, LLC, JPMorgan Chase & Co, Mastercard, One97 Communications Limited, PayPal Holdings, Inc., PayU, Samsung, Visa Inc and others.
KEY MARKET MOVEMENTS
- The mobile payment market is expected to grow at a CAGR of 40% during the forecast period of 2022-2030.
- P2P transfers continue to dominate the market in terms of revenue with over 70% share in 2022 and is expected to grow at a CAGR of 38.7% during the forecast period 2022-2030.
- Closed loop payments is expected to grow at the fastest rate 72.8% during the forecast period, 2022-2030.
- Developing countries are major contributor towards this growth led by China.
- Partnerships are key strategy of mobile payment companies as many players cater to a particular geography.
- Key players in the market include American express company, Apple Inc., Google, LLC, JPMorgan Chase & Co, Mastercard, One97 Communications Limited, PayPal Holdings, Inc., PayU, Samsung, Visa Inc and others.