This story was delivered to BI Intelligence "Payments Briefing" subscribers. To learn more and subscribe, please click here.
Android Pay, which is currently available in 11 markets, including Australia, Japan, and the US, is seeking to grow its reach in 2017.
The wallet launched in Russia on May 24. It counts 15 bank partnerships, including Sberbank, the country’s largest issuer, and other major players like VBR-24 and Alfa Bank.
Android Pay will also have a wide acceptance network — 25% of Russian terminals are NFC-enabled, and major department and grocery stores have already announced plans to accept the wallet. Russia could bring strong conditions for adoption and habit formation, because Android holds the lion’s share of Russia’s smartphone market, and 38% of cardholders already use physical contactless products.
And it has other launches on the horizon, including Canada. Android Pay will launch in Canada on Wednesday, likely to most of the country’s cardholders, though specific partnerships haven’t yet been announced. The tech giant is also eyeing Brazil, Germany, Spain, and Taiwan for potential launches this year, according to The Verge.
The wallet has also set its sights on India, perhaps the most rapid digital payment growth market worldwide. Google is likely looking to link Android Pay with India’s Unified Payments Interface (UPI), a national platform that leverages digital IDs to make it easier for users to transact via mobile, according to the Economic Times. Google has been reportedly looking for ways to move into India’s digital payments market, which has seen rapid growth since last year’s demonetization that removed 86% of currency from circulation. Google likely wants to leverage the UPI to capture some of those gains while accommodating the unique payments ecosystem in India, where card and terminal penetration is low.
New markets are mobile wallets’ path to growth. Finding ways to rapidly scale into new markets is the biggest path to growth for mobile wallets as adoption stagnates. BI Intelligence believes that launches in new markets, rather than growing engagement in existing markets, were the catalyst for Apple’s 450% annual growth last quarter. By scaling into markets with many users and strong engagement potential, Android could catalyze both short- and long-term growth.
Mobile payments are becoming more popular, but they still face some high barriers, such as consumers' continued loyalty to traditional payment methods and fragmented acceptance among merchants. But 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.
BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile payments that forecasts the growth of in-store mobile payments in the U.S., analyzes the performance of major mobile wallets like Apple Pay, Android Pay, and Samsung Pay, and addresses the barriers holding mobile payments back as well as the benefits that will propel adoption.
Here are some key takeaways from the report:
- In our latest US in-store mobile payments forecast, we find that volume will reach $75 billion this year. We expect volume to pick up significantly by 2020, reaching $503 billion. This reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020.
- Consumer interest is the primary barrier to mobile payments adoption. Surveys indicate that the issue is less the mobile wallet itself and more that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits.
- Integrated loyalty programs and other add-on features will be key to mobile wallets taking off. 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.
In full, the report:
- Forecasts the growth of US in-store mobile payments volume and users through 2020.
- Measures mobile wallet user engagement by forecasting mobile payments' share of their annual retail spending.
- Reviews the performance of major mobile wallets like Apple Pay and Samsung Pay.
- Addresses the key barriers that are preventing mobile in-store payments from taking off.
- Identifies the growth drivers that will ultimately carve a path for mainstream adoption.
To get your copy of this invaluable guide, choose one of these options:
- Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
- Purchase the report and download it immediately from our research store. >> BUY THE REPORT
The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of how mobile payments are rapidly evolving.
Read Full Story
Facebook
Twitter
Pinterest
Instagram
Google+
YouTube
LinkedIn
RSS