Mobile payments get closer to maturity

For too many years, some analysts announced “next year will see the explosion of mobile payment”. However, it is necessary to recognize that 2018 has seen giant steps in this direction.

China is probably the most mature markets in terms of mobile payments. In China, the largest mobile payment operators are not financial institutions per se. Statistics from Alipay and WeChat just blow our minds: the leading payment operator, WeChat has over one billion users for its instant messaging platform, 80% of which have already used the TenCent platform’s payment service. Its leading competitor, Alipay boasts 700 million registered users, 100 million of them transacting daily. Also, 60% of Alipay transactions are completed on a mobile device. Alipay accounted for CNY 14.9 trillion (EUR 1.89 billion) in transaction amount, just in Q2/2018, according to pymnts.com.

China UnionPay, the Chinese bank association and payment scheme, said that both the number and amount of transactions on its mobile application hit new record highs during the Double 12 shopping festival, thanks to its strong discount campaigns across the country: the app attracted more than one million new shoppers, just on December 12. The number of payments increased eight-fold and their amount six-fold year-on-year.

The integration between various businesses and payment is also growing outside of China. For instance, Starbucks, which is as much a payment innovation company as a coffee chain, is always expanding its payment options. Mobile payment through the Starbucks payment app already accounts for 30% of all transactions at the coffee chain in the USA.

The UK is already ahead of many other payment markets as already nearly half of all UK payments, including cash, are now contactless, according to Worldpay. Interestingly, the payment processor also acknowledges, a part of the growth is now due to the growing adoption of mobile payment tools, namely Apple Pay and Google Pay.

Zelle, the US mobile payment app supported by over 100 financial institutions including Bank of America and Wells Fargo, has more than 27 million users and accounts for US$ 94 billion (EUR 82 billion) in total transaction amount. Zelle essentially targets P2P payments and is already rivalling PayPal in terms of payment volume.

These factors all go into the same positive direction. The future will tell when we experience global mass adoption.