The ever-increasing popularity of the mobile wallet looks set to scale new heights. Introduced as a concept less than 25 years ago, the mobile wallet market has grown in leaps and bounds and, if reports are to be believed, has already surpassed the $1 trillion global mark.
Let’s examine the statistics, the reasons for this growth spurt, and what we can expect from this payment solution going forward.
So, what exactly is a mobile wallet?
For those who don’t know, a mobile wallet is an application on a smartphone that enables consumers to make online purchases directly from their mobile devices. It also allows consumers to use their smartphones to pay for in-store purchases, often by simply scanning a QR code.
Mobile wallets offer customers an easy and convenient way to pay for goods and services. Individuals do not need to travel with loads of credit or debit cards. Many mobile wallets now include various loyalty program features such as cashback and loyalty rewards, meaning customers are further incentivised to make purchases using their phones.
As a result, retailers are increasingly using mobile wallets as part of their customer acquisition and customer retention strategies. Lastly, mobile wallets are seen as an effective method for facilitating touchless and contactless payments. Given the current global situation, this is a big plus.
What do the stats say?
Quite a lot, actually. And it’s all good news for the mobile wallet market. According to Statista research, more than a billion individuals currently use mobile wallets as a method of payment. This number is expected to increase exponentially over the next few years.
The Asia-Pacific region reported the highest usage rates, with the bulk of users deriving from China and Thailand. These mobile payment rates translate into massive financial sums.
Statistics reveal that the global mobile wallet market was valued at $1, 04 trillion in 2019. Considering that this figure was estimated to be roughly $368 billion as recently as 2017, this would represent a staggering jump of more than $670 billion in a little under three years! This growth is not expected to slow down anytime soon, with reports indicating an expected global mobile wallet market value of more than $7.5 trillion in 2027.
South Africa has also seen significant mobile wallet market growth in recent times. GlobeNewswire reports that the local market has been growing at a compound annual growth rate of 12.6% since 2018. This figure is expected to rise to 12.9%, resulting in an anticipated mobile wallet market value of $29 billion by 2025.
In a mobile wallet market, everyone wins
The mobile wallet holds benefits for both the consumer and the businesses they frequent. Several of these benefits have already been discussed. Companies understand that mobile wallets are not merely mobile payment options; they can also be leveraged to better connect with consumers. Consumers today spend an excessive amount of time on their smartphones.
By integrating the mobile wallet system with a loyalty program, companies have a platform through which they can market deals, discounts promos, and rewards to their customers. They can leverage the platform to sell new goods and services and also reward their loyal customers.
Over time, companies can use the consumer data gained through the loyalty programs and mobile wallets to create personalised offers for their customer base.
UBU International provides a great example of how to combine a loyalty program with a mobile wallet perfectly. UBU offers businesses the opportunity to list a marketplace with a vast customer base. It’s unique in that it doesn’t need a business to have set up or even facilitate payment options.
We’ve already developed a mobile wallet solution that is easy for both consumers and businesses to use. Our loyalty program is already well-established, and customers who shop via any of the mobile wallet apps earn rewards on every purchase. It’s an ideal platform to attract new customers and retain existing ones.
The future of payments
Judging by the statistics as well as the reasons provided, it’s pretty clear that we are moving towards a future where payments become increasingly contactless. Mobile wallets seem to be the logical home for facilitating these payments.
By offering a secure, convenient medium, we expect to see more companies use mobile wallet solutions going forward.
Businesses will also increasingly make use of mobile wallets as a digital marketing tool, and to do this effectively, they need to consider platforms that combine mobile wallets with a loyalty program. The mobile wallet plane is fuelled and ready for take-off. Now is the time for your business to book a seat.