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Are you ready? Gartner states that the global market for mobile payments will be worth $720 billion in transactions by 2017, up from about $235 billion in 2014.

http://www.mobilepaymentstoday.com/articles/spanning-the-globe-with-mobile-payments/

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Spanning the globe with mobile payments

June 3, 2016

By Oren Levy, CEO, Zooz

You don't need a crystal ball to predict that the use of mobile phones is going to escalate in the years to come. Statista reports there were 4.77 billion mobile phone owners worldwide in 2015. This number is expected to rise to 5.07 billion by 2019.

Cell phones provide a slew of vital services aside from their obvious use as mere telephones. Smartphones are used for texting, online browsing, emails, social media, on-demand video downloads, job searches, payments and more.

Mobile phones and payments
The proliferation of mobile phones worldwide naturally extends to their use for payment purposes. Gartner states that the global market for mobile payments will be worth $720 billion in transactions by 2017, up from about $235 billion in 2014.

All of these figures and projections have inspired mobile money providers to offer a growing range of payment services including international payments, ecommerce payments, and even salary payments.

Who's adopting mobile wallets?
Today's typical mobile phone user is inseparable from his or her cellphone. Like loyal pets, mobile devices follow their owners anywhere and everywhere – you will find them at work, at home, on the bus or metro, in-store, at the movies, etc. As such, it is the ideal platform for payments of all sorts.

Nevertheless, while many FinTech experts have been predicting widespread use of mobile wallets for assorted payments, their adoption has been sluggish in many Western countries. There are over 200 mobile wallet systems in the world, but many of them are to be found in Asia, Africa and the Middle East.

Main western mobile providers
There is no lack of mobile wallet providers in the West: Payment industry veteran PayPal is accepted on thousands of mobile sites and apps, enabling users to pay from any location without sharing personal financial data. Apple Pay is a tap-and-go service that allows iOS users to perform payments with NFC-enabled credit card terminals. Samsung Pay enables payment not only via NFC tap-and-pay but also on magnetic stripe terminals. With Google's Android Pay, users load their debit or credit cards into the Android Pay app only once, and subsequently pay using a smartphone in the store.

Retailers like Starbucks and Walmart have successfully launched their own closed-loop mobile payment apps, which make it easy to award customers for loyal purchases.

The use of mobile phones for payments in emerging countries is booming. Below we will examine the different mobile payment methods in various developing countries and the reasons for their popularity:

China
There are several highly popular mobile payment methods in China including AliPay, TenCent's WePay, and WeChat. One of the main growth drivers in the Chinese mobile wallet market is the rapid upsurge in the Internet penetration rate of the country, which is driven by the growing adoption of smartphones.

The Chinese distrust unfamiliar foreign payment providers, so newcomers to the Chinese market like Apple Pay and Samsung Pay will have their work cut out for them. The average Chinese lacks trust regarding banks and money handling in general, and their payment preference is COD, so they can check out their purchases before laying out money. Mobile payment wallets inspire a feeling of security among Chinese consumers.

Russia
The Russian Federation features several widespread mobile payment methods. The leading wallet is the QIWI Wallet, which is similar to a debit card and enables client self-service and payment via QIWI terminals. WebMoney is an international settlement system that offers users an online platform for e-commerce. Yandex.Money performs financial transactions in real time in Russian rubles, allowing payments and money transfers online.

A recent analysis of Russian e-commerce consumers indicates that over 50 percent of customers are unwilling to carry out transactions online. There is also a deep-seated lack of trust in banking institutions due to unfavorable past experiences. Here, too, local mobile wallets provide a sense of security among users.

Africa
The largest and most widespread mobile payment service in Africa is M-Pesa, a mobile phone-based money transfer, financing and microfinancing service. M-Pesa allows users to deposit, withdraw, transfer money and pay for goods and services. Other rising solutions are Airtel Money and MTN Money, which enables money transfer and making online payments.

Few Africans have bank accounts or credit cards. Mobile money originally targeted rural customers making small personal payments, or cash withdrawals from kiosks. Today, mobile payment methods give millions of people access to the formal financial system. It is evident that this type of branchless banking is now being used as a separate payment channel strategy that forgoes bank branches.

India
India features various types of mobile payment services such as Paytm, ikaz, Mobi Kwik, Oxigen and several others. The reason for the proliferation of these providers is that while in Western countries, desktop PCs and laptops were the first web-enabled devices, in India nearly 60 percent of users accessed the internet for the first time via their mobile phones.

Indian consumers are ripe to conduct payments via their mobile phones. However, due to the fact that 2G bandwidth still prevails there, connectivity is often poor. While there are at least 13 million retail establishments spread out all over the country, at this stage there is still little incentive for merchants to acquire costly POS terminals.

It all comes down to need
The difference between mobile payment usage in developed and emerging countries stems from the actual need for additional payment modes. In Western countries, there is a wide variety of payment forms including cash, debit cards, alternative payment methods, and a wide range of credit cards. So Western consumers will start using mobile payment methods only when they feel that mobile payment means offer a significant advantage over existing ones. Currently, this is not the case.

However, in developing countries, where banking infrastructure often does not exist or in regions where consumers lack trust in the government and banks, mobile payments offer a secure and immediate tool for payments that will undoubtedly continue to multiply and prosper.