A new Forrester Research report finds that the European mobile payments market will hit $165 billion by 2021. BizReport’s Helen Leggatt, who cites the Forrester Report, notes that mobile in-person payments, along with remote payments are expected to drive growth. More specifically, mobile in-person payments will increase almost fivefold between from 2016-2021, accounting for nearly 16% of all mobile payments.
“Increased consumer awareness has, and will continue, to boost growth. The launch of mobile payment platforms throughout Europe, such as Wa! (BNP Paribas) in France, as well as the market entry of giants such as Apple and Google, have provided far more opportunities for consumers to recognize and use mobile payments,” writes Leggatt.
In related news, BusinessInsider reports that contactless payments are already at an all-time high in the UK. Indeed, UK consumers made £3.3 billion ($4.3 billion) in contactless payments during February 2017, representing 28% of total card payments in the country.
“That figure is rising fast — the prior February, contactless represented 14% of card payments, and in the same month in 2015, they accounted for 5%. This indicates that the UK is a population that’s attuned to contactless payments,” confirms BusinessInsider’s Jaime Toplin.
According to Toplin, although mobile payments are becoming more popular, they still face some high barriers, including continued consumer loyalty to traditional payment methods and fragmented acceptance among merchants.
“[However], as loyalty programs are integrated and more consumers rely on their mobile wallets for other features like in-app payments, adoption and usage will surge over the next few years,” he adds. “Consumers are showing interest in wallets with integrated loyalty programs. Other potential add-ons, like in-app, in-browser, and P2P payments, will also start fueling adoption. This strategy has been proved successful in China with platforms like WeChat and Alipay.”
It should be noted that Xiaofeng Wang, a senior analyst at Forrester, recently penned an article in Forbes that explores what global mobile wallet players can learn from Asia’s digital leaders. According to Wang, the future of mobile wallets is expected to go “far beyond” mobile payments.
In the West, says Wang, this vision is still very much a work in progress. However, the China-based Alipay and WeChat have steadily evolved their mobile wallets into rich customer engagement platforms.
“While mainstream Western mobile wallets primarily focus on payments, pioneer mobile wallets in China have taken aggressive steps and become powerful customer engagement tools with innovative features — such as WeChat’s social gifting and Alipay’s augmented reality coupons and red packets,” he writes. “Their mobile wallet innovations span the customer life cycle.”
As Wang explains, the successful marketing use cases developed on Alipay and WeChat Wallet will ultimately inspire third-party players like Apple and PayPal to morph their mobile wallets into more powerful customer engagement platforms. For example, says Wang, mainstream wallets will add customer engagement features to attract more traffic to offline stores. Indeed, it should be noted that PayPal recently added options like “stores nearby” and “order ahead.”
Moreover, says Wang, the influence of Alipay and WeChat Wallet will create more space for third-party providers.
“The West’s different ecosystem creates added competition for its mobile wallet players and gives third-party providers opportunities to add customer engagement features and offerings to Western mobile wallets and uncover the potential of marketing,” he states.
Last, but certainly not least, Wang pointed out that most customers don’t want to download their brands’ mobile apps.
“So, marketers need to smartly leverage the mobile ecosystem to borrow mobile moments from the popular apps that their customers already use every day. Mobile wallets are such apps,” he concludes.