Despite the head start mobile wallets got in the U.S. when Apple Pay launched more than two years ago, markets outside the U.S. are exhibiting that they are much better positioned for mobile wallet adoption, a new report from Fitch notes.
Apple Pay usage in the U.S. is increasing, but at a much
Samsung Pay is the first mobile wallet to launch a serious attack on the consumer value proposition, this week introducing a
But overall mobile payments have a much better shot at success in less-developed, cash-dominant markets like Asia and Africa, where mobile wallets are helping governments to reduce tax evasion and illegal activities, versus developed markets like the U.S. where convenient payment methods like credit and debit cards are well established, according to Taiano.
“A case in point is Apple Pay, where despite launching first in the U.S., the majority of Apple Pay’s transactions now come from non-U.S.-markets,” Taiano said.
Apple has not provided a specific breakdown of where Apple Pay usage is centered, but the company said Apple Pay volume totaled $10.9 billion in 2015, and the vast majority of that was in the U.S.
Apple Pay’s global reach has increased dramatically this year, which helped drive Apple Pay’s transaction volume 500% higher in the quarter ended Sept. 30, 2016 compared to the same quarter a year earlier, Apple’s CEO Tim Cook said Oct. 25 during a conference call with analysts. Apple Pay reached several more countries this year, including Japan and Russia, and it will be available in Spain in the next couple of months, reaching its 11th nation.
Several other mobile wallets are on the rise globally. Rival wallets Android Pay and Samsung Pay are also expanding internationally, while China has two highly popular mobile wallets operated by Alibaba and Tencent that had a total estimated $1 trillion in mobile transactions last year, according to data from iResearch.
U.S. payments industry players still have a strong interest in getting mobile wallets off the ground locally, with everyone from startups to banks, payment networks, retailers and wireless phone carriers having invested millions in mobile wallet development over the last five years, Taiano said.
But competition amid a lack of consumer demand in the U.S. hasn’t helped the market.
“The launch of numerous mobile wallets into the (U.S.) marketplace has created added confusion for consumers as it relates to acceptance of the various wallets at the checkout line,” Taiano said.
In-app and online payments may hold some promise for mobile wallet growth in the U.S., but that base is still relatively small, as online sales will account for less than 10% of total retail sales this year, according to Fitch’s research.
