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An overall uptick in US consumer time spent on smartphones is trickling down to payments and commerce and driving volume in three core categories: mobile commerce (m-commerce), mobile peer-to-peer (P2P) payments, and mobile proximity payments.
Combined, these categories are estimated to see more than $1 trillion in volume in 2023, per eMarketer — creating a massive opportunity for players in the space.
Big tech companies, payments providers, and retailers are already offering mobile wallets — which enable these types of payments — and competing for share of the growing market.
But an uptick in volume combined with intense competition is shifting the goal for wallet providers, which are offering services across mobile payment types in order to become users’ primary wallet for as many mobile-originated transactions as possible. Eight core providers — Apple, Google, Samsung, Starbucks, Venmo, Zelle, Square Cash, and Amazon — have emerged at the forefront of this arena.
This surge in wallet usage has implications for providers beyond wallets in the payments value chain, as issuers, processors, and terminal vendors will also need to adapt. If they don’t, they’ll risk not only missing out on a massive potential source of volume, but also losing clients or hindering merchant relationships — making the stakes higher than ever.
In this report, Business Insider Intelligence sizes the mobile payments market and identifies what’s driving growth across m-commerce, mobile P2P, and mobile proximity payments. We then identify the core players at the forefront of the space and examine their path to achieving primary wallet status based on their usage, key features, market positioning, and competitive standing, Finally, we discuss the other providers in the payments ecosystem that need to adapt to a rise in mobile wallet usage, and offer recommendations about how to do so.
The companies mentioned in this report include: Amazon, American Express, Apple, Bank of America, Braintree, Chase, Costco, Early Warning, Finablr, Google, GrubHub, Hulu, Ingenico, Lyft, Old Navy, Mastercard PayPal, Sephora, Samsung, Square, Starbucks, Target, Travelex, Uber, Visa, Venmo, Whole Foods, Zelle
Here are some key takeaways from the report:
- US mobile wallet volume is set to swell from an estimated $662.3 billion in 2019 to an estimated $1.33 trillion in 2023 across mobile commerce, mobile P2P payments, and mobile proximity payments, according to eMarketer.
- Mobile proximity payments are set to grow the fastest, with an increase in contactless penetration and familiarity combined with a wide untapped addressable base giving it a boost.
- Mobile P2P payments will represent the largest share of volume, with transactions exceeding $600 billion in 2023, thanks to rapidly increasing engagement from existing customers who will replace more cash transactions with digital providers.
- Eight key players lead the mobile wallet market and have the best shot at obtaining primary wallet status as they expand to offer new payment types: Apple, Google, Samsung, Starbucks, Venmo, Zelle, Square Cash, and Amazon.
- Issuers, processors, gateways, and terminal vendors also need to adapt to mobile payments by increasing incentives for mobile wallet users, adding new functionality for clients, and seeking out partners who are not just mobile-optimized, but mobile-first.
In full, the report:
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- Sizes the US mobile payments market through 2023 and explains drivers of the three core payment types.
- Identifies the eight core mobile wallets leading the industry based on existing market reach, brand awareness, and feature-set leadership.
- Examines each wallet’s user base, industry positioning, and competitive strengths and weaknesses through the lens of primary wallet status.
- Identifies other categories of providers, including issuers, processors, gateways, and terminal vendors that will be impacted by the rise of mobile wallet usage.
- Provides recommendations for these providers to best capitalize on increasing volume in the space.
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