We will lead world growth in mobile commerce transactions, as remote payments explode across Asia-Pacific. Is your business mobile ready?
International Data Corporation (IDC) predicts worldwide mobile payments will account for US$1 trillion value in 2017, up 124% from the less than US$500 billion expected in 2015 and those in the Asia/Pacific region will make a huge contribution.
IDC added countries like Australia also have the potential to lead the world in mobile payment (mPayment) development. It believes that the strongest growth for mPayments will be driven in part by rising levels of mCommerce as emerging nations come online for the first time and witness an internet boom via smartphones.
Also, the limited state of credit/debit card adoption in Asia/Pacific will force mPayments behaviour to shift to using bank account-linked mobile wallets.
Smartphone v credit cards
“Smartphone adoption has grown much more rapidly than general banking and card adoption in the region,” said Shiv Putcha, Associate Research Director, and AP Connected Consumer Marketplaces at IDC Asia/Pacific.
“Recent focus on financial inclusion policies in various countries has given a boost to connecting the unbanked. This phenomenon, coupled with the innovation of semi-closed wallet schemes linked to bank accounts, has given a major boost to mobile payments in Asia-Pacific.”
“We see a duality between the mature Asian markets like Australia, Hong Kong, and Singapore versus the emerging Asian economies like China, India and Indonesia.
“The mature markets exhibit strong levels of banking and card adoption and will tread a similar path as mature Western economies have for mobile payments, with a focus on proximity solutions based on Near Field Communications (NFC). These will be fertile markets for solutions like Apple Pay and Android Pay.”
Our love affair with smartphone shopping
There’s certainly no shortage of evidence with regard to our love affair with shopping using our smartphones with a recent survey stating one in four of all online shopping purchases by Aussies are being done on a smartphone as part of a burgeoning m-commerce sector which is now worth $4 billion annually.
According to Senior Analyst, IDC Retail Insights, Michael Yeo, “the markets of Asia/Pacific are highly diverse and each displays significantly different characteristics as relates to their ultimate potential for mobile payments.”
IDC has group these countries into three clusters – Card Payment Leaders, Mobile Payment Leaders, and Mobile Money Leaders. Australia will remain a card payment leader and view mobile payments as an efficiency driver with proximity solutions seeking to displace the need for physical swiping of cards.
The remaining Asian markets will look at mobile payments as a GDP booster and to address financial inclusion imperatives. Mobile payments in these markets will jump start mCommerce much like Alibaba has in China.
Ready for the mobile payment explosion?
With 16 million Australians using smartphones today and most of them happy to pay with them instore, is it a market you can afford to miss out on?