Mobile payments are set to go very big globally, with the Asia-Pacific region looking to lead the charge.
Market research firm International Data Corporation (IDC) predicts that, in 2017, mobile payments across the globe will account for $1 trillion — a 124 percent increase from the under $500 billion expected in 2015. Coming at a time when remote payments are on the rise in Asia-Pacific markets — due to, IDC attests, a large number of initiatives and expanding mobile commerce capabilities — that region is expected to lead the world in mobile payments two years from now.
“Smartphone adoption has grown much more rapidly than general banking and card adoption in the Asia-Pacific region,” said Shiv Putcha, associate research director of AP connected consumer marketplaces at IDC Asia-Pacific, in a press release. “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,” Putcha continued. “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.”
Despite the mobile payments boom predicted for the Asia-Pacific region, IDC points out that Asia’s emerging markets — which account for the majority of the continent’s population — are unlikely to embrace NFC technology in their applications, instead relying on mobile wallets that operate in a manner similar to prepaid accounts.
Commented Michael Yeo, senior analyst at IDC Retail Insights, in the release: “The markets of Asia-Pacific are highly diverse, and each displays significantly different characteristics as relates to their ultimate potential for mobile payments.”