The global mobile wallet market is expected to reach USD1,604.4 billion by 2018, growing at a compound annual growth rate (CAGR) of 30.7 percent from 2012 to 2018, a report from Transparency Market Research showed.
The report said Europe, the Middle East and Africa (EMEA) is expected to be the largest market for the mobile wallet industry in 2018.
Transparency Market Research said the surge in the demand for mobile wallets can be attributed mainly to the global increase in Smartphone penetration.
"The advent of affordable options such as budget smartphones and the facilitation of NFC (Near Field Communication) technology both in the user’s device as well as in Point of Sale (POS) terminals are expected to drive this market over the next few years," the company said.
However, lack of awareness regarding the functioning of mobile wallets as well as considerable concerns among users about security and privacy are a few factors that may hinder market growth. However, the technology is expected to enjoy considerable support from stakeholders in the years to come as they provide flexible payment services to users along with better brand recall value, thus benefitting merchants and payment providers alike.
The report noted that retail formed the largest application of mobile wallets and was valued at USD144.8 billion in 2011.