Predicted to inflate to a market size of around US$250 billion by 2024, mobile wallets otherwise known as e-wallets are becoming a common tool for everyday transactions.
The analysis is based on a study by Global Market Insights, which also discovered that Asia Pacific in recent years has led the way in mobile wallet development, representing 90% of the market in 2017. From Paytm in India to Alipay and WeChat in China, Asia has been a favourable environment for mobile wallets to grow.
The rise of mobile wallets in the region has led to several businesses and their treasury departments to revaluate how they handle and process transactions from these emerging players. While two mobile wallet providers dominate markets like mainland China, other areas such as Taiwan are home to over 20 mobile wallet providers, which results in an extra layer of complexity when dealing with transactions.
Adhering to concerns from clients, several transaction banks have started to investigate and develop solutions for companies to address mobile wallet transactions. Deutsche Bank, for instance, last summer invested in ModoPayments in an effort to expand its payment network beyond its traditional banking channels. ModoPayments works with mobile wallets and peer-to-peer networks.
Other banks such as HSBC have created country specific solutions in areas where mobile wallets are move prevalent. This includes China, where the bank established a omni-channel collection service helping retailers to easily conduct mobile wallet payments. Fellow London-based bank, Standard Chartered, has established partnerships with several popular mobile wallet providers around the world. In Asia, Standard Chartered has co-created solutions with the likes of WeChat, establishing a mobile collection solution for Juneyao Airlines a couple of years ago.
One note of caution, while various financial stakeholders have evidentially made preparations for the growth of mobile wallets, there is a risk that growth could be capped at least in Asia. This concern arises from the increased acceptance of government-backed payment infrastructure networks such as PromptPay in Thailand or UPI (United Payments Interface) in India. Not only does the government seal of approval add additional comfort to everyday users but the inability of mobile wallets to be interoperable could actually reverse the uptake in usage of mobile wallets in the Asian region.