Who is ahead in the mobile wallet wars?

Global spend via mobile wallets is expected to rise by nearly 32% this year to US$1.35 trillion, a study from Juniper Research has found.

The study, “Mobile Wallets: Service Provider Analysis, Market Opportunities & Forecasts”, found that spend is currently concentrated in the east Asia region, especially China, “due primarily to the success of Alipay and WeChat.”

However, “moves by PayPal and Apple to offer wallets which can be used both instore and online means that wallets will increasingly become the default payment mechanism in other markets, ” Juniper Research said.

The study by the firm found that mobile wallets promoted by Apple, Google and Samsung and Google “have all expanded their range: by the end of 2016, the services were available in 13, 8 and 9 markets respectively.

“Between them, they have rapidly scaled their active user base, which had reached an estimated 74 million by the end of 2016.”

PayPal, Juniper argued, are in “pole position [thanks to] PayPal’s decision to introduce an HCE (Host Card Emulation) NFC solution to enable POS payments.” It described this “as a key disruptive moment in the wallet wars.

“According to the research, this – allied to the burgeoning success of its social payments subsidiary Venmo – places PayPal in pole position to capitalise on the increased demand for mobile wallets.”

Juniper said that “arguably the primary challenger for Apple Wallet, Android Pay and Samsung Pay in the wallet wars is PayPal. By the end of September, PayPal had 192 million active wallets worldwide, including 13 million merchants.”

In 2015, 28% of all PayPal transactions (or 1.37 billion) occurred via a mobile device and  Juniper Research estimates that PayPal’s total payment value via mobile devices in 2016 reached US$102 billion. Juniper also provided perspective on Apple Pay’s progress in the US market, which has been impeded by the “paucity of contactless cards in the US market” due to the “belated migration to EMV.”

The proportion of US retailers supporting the service rose from 4% at the end of 2014 to 35% in late 2016, amounting to 4 million physical locations.

“Although a majority of the remaining US retailers are now believed to own POS terminals capable of fulfilling contactless transactions, a significant number have not yet activated the technology,” Juniper said.

Juniper listed the 12 leading wallet providers as: Alipay, Paytm, Android Pay, Samsung Pay, Apple Pay, Visa Checkout, Masterpass, Vodafone M-PESA, Orange Cash, Vodafone, PayPal and Weixin (WeChat).

This article first appeared on Banking Day.

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