The rise of the mobile channel – global mobile wallet adoption

Mobile wallet and payments have been hot topics for a few years, with many predicting the end of traditional card payments and overstuffed “Costanza” wallets. Rumours of cards’ demise have been a bit overblown, particularly in countries with very well-established card payments infrastructure.

There is much more adoption of mobile wallet and payments in traditionally cash-focused economies. Mexico and Brazil have much higher rates of mobile wallet adoption than do the US or Canada. Existing infrastructure and entrenched consumer behaviours leave mobile wallets a solution in search of a problem in mature card markets, such as the US and Canada – according to a new report by Aite.

That said, there is new growth in in these regions, most likely driven by a combination of more POS terminals accepting contactless mobile payments and mobile wallets built into many of the newer mobile phones on the market (Figure 2).

There is a similar pattern across EMEA, where most countries have well-established card payments systems, including contactless e-purse payments for small purchases and transit payments. In fact, some countries in the Nordics are working to eliminate cash. For example, the Danish government has proposed moving toward electronic money for most transactions (Figure 3 and Figure 4).

In most cases, mobile wallet adoption in EMEA is generally not showing dramatic increases, and for the most part, adoption is less than 25%.

A notable exception is the UAE—part of this higher adoption rate could hinge on government and industry initiatives supporting contactless, cashless payments in the UAE.

The case in the Asia-Pacific is quite different, with high rates of mobile wallet adoption in India, Thailand, and Indonesia. This is likely due to a large number of mobile-based peer-to-peer payments, and because mobile devices act as the primary access to the internet for many individuals and households.

In many cases, individuals may carry multiple devices and thus have multiple wallets. As with the US and Western Europe, Singapore, Australia, and New Zealand have lower rates of adoption, primarily due to more mature card payments infrastructure and consumers’ general comfort utilizing plastic cards (Figure 5).

Mobile wallet adoption in Asia is generally much higher than in other parts of the world, especially in fast-growing economies such as India, Thailand, and Indonesia. These regions are generally leap-frogging traditional card infrastructure and usage patterns while adopting the latest and greatest technologies. These markets are also very mobile-oriented in that most people’s internet connection is through a mobile device rather than a desktop or laptop.

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