According to a new market report published by Transparency Market Research, "Mobile Wallet Market - Global Industry Analysis, Size, Share, Growth and Forecast, 2012 - 2018," the global mobile wallet market is expected to reach $1,602.4 billion by 2018, growing at a compound annual growth rate (CAGR) of 30.7 percent from 2012 to 2018. Europe, the Middle East and Africa (EMEA) is expected to be the largest market for the mobile wallet industry in 2018.
The surge in the demand for mobile wallets can be attributed mainly to the global increase in smartphone penetration. The advent of affordable options such as budget smartphones and the facilitation of near field communication (NFC) technology both in the user's device as well as in point of sale (POS) terminals are expected to drive this market over the next few years. However, lack of awareness regarding the functioning of mobile wallets as well as considerable concerns among users about security and privacy are a few factors that may hinder market growth. Stakeholders in the mobile wallet ecosystem are attempting to alleviate these concerns and aiming to provide complete safety of personal and financial information.
Retail formed the largest application of mobile wallets and was valued at $144.8 billion in 2011. This trend is expected to continue growing to the ease of payment using smartphones at these locations, as well as initiatives undertaken to equip POS devices in convenience stores. Vending machines are a niche but significant application of the mobile wallet technology and are expected to enjoy considerable support from stakeholders. They provide flexible payment services to users along with better brand recall value, thus benefitting merchants and payment providers alike.