Mobile Payments Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

The mobile payments market is expected to grow at a CAGR of 29.5% over the forecast period (2022 - 2027). The stores and services worldwide are rapidly adopting mobile payment applications, such as PayPal, Samsung Pay, Apple Pay, AliPay, and WeChat Pay, to accept and transfer payments. With increasing internet penetration and rapid growth in online retailing, this trend is expected to continue over the forecast period.

• Cash is increasingly being used for payments that are limited to small amounts; for a larger share of payments that involve large amounts, consumers are opting for either card payments, net banking, or mobile payments. According to a survey conducted by payment processor TSYS, which involved 1,222 consumers, 54% of the participants preferred paying via debit cards, 26% chose credit cards, and 14% preferred using cash. This trend is expected to shift toward accepting mobile payments, even for small transactions in recent times.
• The smartphone industry's growth can be attributed to the increasing popularity of several critical operating systems, namely Android and iOS. Google's Android is one of the most popular smartphone operating systems globally. The availability of various features in Android phones boosts Android OS's popularity among consumers. Due to the high prevalence of Android, several smartphone manufacturers are adopting it as their operating system. Thus, the increasing demand for and the launch of various Android-based smartphones are expected to drive the growth of the studied market.
• According to Ericsson, the number of smartphone subscriptions worldwide surpasses six billion and is expected to grow by several hundred million in the next few years. China, India, and the United States have the highest smartphone users. By 2026, the number of smartphone subscriptions is expected to increase to 7516 million.
• Also, according to GSMA, in North America, the number of smartphone subscribers is expected to reach 328 million by 2025. Moreover, by 2025, the region may witness an increase in the penetration rates of mobile subscribers (86%) and the Internet (80%). According to GSMA, by 2025, Europe is estimated to register the highest Internet penetration rate (82%) and smartphones (88%).
• According to a survey conducted by VISA and MADA, 66% of Saudi respondents have reduced their in-store purchasing since the outbreak of the epidemic, while 48% have increased their online shopping. When they shop in stores, 77% prefer digital payments to cash, with 56% of respondents opting for contactless cards and mobile wallets (60%). The top reasons for their increased preference for digital payments were improved trust in payment system security, speed, convenience, and reduced human touch.

Scope of the Report

Mobile payments automate payment systems by offering an alternative method of payment using a portable electronic device like a mobile or tablet. Mobile payments can also be used for fund transfers digitally rather than paying with a cheque or cash. Mobile payment technology provides diverse applications in end-user industries like movie tickets, food, and retail stores.

The Mobile Payments Market is segmented by Payment Type (NFC, QR Based, Online Digital Payments, Text-based ), and Geography.

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Key Market Trends

E-commerce to Drive the Mobile Payments Market

• With the increasing number of smartphones worldwide and high-speed cellular networks present in most countries worldwide, the e-commerce industry is growing. With an increase in the E-commerce industry, mobile transactions are also expected to grow rapidly, providing a significant boost to the mobile payments market.
• The European e-commerce business has been expanding rapidly, providing exciting potential for online retailers in various industries. France is a key consumer market in Europe and a significant e-commerce market in terms of internet penetration, percentage of e-commerce consumers, and average expenditure. According to the E-commerce Foundation, in 2020, the e-commerce sector in France accounted for 4.79% of the country's GDP. Further, the e-commerce industry was expected to account for 5.19% of GDP in 2021.
• The rise of e-commerce and the O2O market has created many scenarios for people to adopt mobile payments in recent years. According to WorldPay, digital/mobile wallet is expected to occupy 60.2% of e-commerce payments by 2024 in the Asia-Pacific region, followed by credit card (16.1%). On the other hand, mobile payment played a crucial role in reducing friction and making on-demand, small-ticket services easily adoptable when they first began to emerge in the region; rapid developments in these sectors, in turn, further drive the uptake in mobile payment usage.
• The e-commerce sector in China is expected to register high growth due to the proliferation of mobile payments and key players, such as Alibaba, JD.com, and Tmall. Online payment methods are rising due to the convenience of mobile shopping and increased consumer spending, specifically in smaller cities and rural areas. According to CNNIC, online shoppers grew from 638.8 million in the first half of 2019 to 782.4 million by the end of 2020.​
• Online retail or e-commerce halted significantly in China due to the global COVID-19 outbreak, leading to a worldwide lockdown. However, online groceries have significantly increased their market presence, as Chinese citizens are urged to stay home and buy groceries online. Also, online grocery retailers are stimulating online buyers to engage in cashless payments as a measure of safety, which is further expected to increase the traction of mobile payments.

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