Market Trends of United States Mobile Payments Industry
This section covers the major market trends shaping the US Mobile Payments Market according to our research experts:
Increase in adoption of Mobile Wallets
- Mobile wallets are becoming increasingly popular in the United States, accounting for 29.2 % of the regional transaction value for e-commerce in 2021. Wallets will surpass credit cards in the United States in 2022 and are expected to account for nearly one-third of regional e-commerce spending by 2025, led by Apple Pay, Amazon Pay, Google Pay, and PayPal.
- Mobile wallet usage is growing in the united states, with more growth expected as contactless POS terminal penetration grows. Furthermore, credit card use reduced in 2021. On the other hand, there is an increasing shift in the usage of cards in making payments through mobile wallets.
- Further, with the increase in millennials and high-income households in the country, the adoption of mobile payments for contactless payments is increasing. In a study conducted by Merchant Machine, it was found that the adoption of mobile wallets increased by 14% between 2019 to 2021.
- Further, with increasing offerings of mobile wallets, such as digital rewards programs, consumers are increasing their adoption of mobile wallets. These rewards provide customers the ability to acquire and redeem loyalty points, similar to the online checkout.
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Significant Growth in Mobile Payments is Expected Due to Technological Advancement
- Mobile payment technology continuously evolved over the years across various regions worldwide. For a significant time, users were hesitant to utilize Mobile NFC technology for contactless payments. Also, the advancement in credit card contactless technology has resulted in the slow adoption of mobile payments.
- However, due to the advent of Covid-19, the adoption of mobile payments has been accelerated. With many users staying at home due to several lockdowns in the country, the adoption of mobile payments in shopping and e-commerce has increased.
- With such an increase in the adoption of mobile payments, service providers are increasingly investing in new technologies to secure and improve the performance of mobile payments. Technologies such as AI and ML, Biometric authorization, and many more are being integrated into mobile payment solutions to increase the security of payment technologies.
- Security is a major component of mobile payment technology as massive amounts of data are generated daily due to mobile payments. Integration of AI and ML into mobile payment technology for scanning for frauds has recently increased. Banks constantly use Machine Learning to detect fraudulent activities by analyzing the data generated.
- Further, in recent years, many banking service providers have integrated biometric authorization solutions, including fingerprint, iris, retina, vein, and other types of scanning. Moreover, with many customers migrating to mobile payments, the financial institutes are obliged to provide secure authentication processes, leading to advancements in biometric technology for authorization.
