Apple Pay Expected to Lead OEM Wallets as Contactless Payments Grow
New data from Juniper Research shows that contactless payments could reach a major milestone even earlier than expected. According to the firm’s report, contactless transactions are on track to surpass $1 trillion in 2018 (a year earlier than previously estimated) and are anticipated to exceed $2 trillion by 2020. Additionally Juniper suggests that big-time players like Apple Pay, Samsung Pay, and Google Pay will be leading the way for mobile payments and spurring adoption.
Referred to by Juniper as “OEM Pay” options — meaning “official equipment manufacturer” payment options like Apple Pay or Samsung Pay — the firm expects these types of payments will reach 450 million by 2020. Of those OEM payments, Apple is expected to account for half the market. That’s somewhat surprising considering that it’s actually Google’s Android operating system that dominates the mobile landscape when it comes to market share. Meanwhile newcomers such as Fitbit’s Fitbit Pay aren’t likely to gain much market share according to Juniper. Summarizing the company’s report, researcher Nitin Bhas said, “We believe that growth over the next 5 years will continue to be dominated by offerings from the major OEM players. Additionally, we now have the likes of Huawei Pay and Fitbit Pay launching in several markets; this is now included in Juniper’s contactless forecasts.”
Notably, since Juniper’s research focused on OEM payment options and not third-party offerings, it did not account for what was recently found to be the true leader in mobile payments: Starbucks. Moreover, while OEM mobile wallets are expected to account for 15% of contactless payments, the majority of contactless payments will not come via mobile devices but from physical credit cards and debit cards. Still payments made using OEM wallets are expected to total $300 billion by 2020.
What’s also interesting is that much of the growth contactless payments are seeing isn’t coming from the United States. Instead it’s Europe and Asia leading the way, with China and the Asia Pacific making up 55% of global contactless payments in terms of transaction value. Once again this growth is led by card payments with mobile wallets trailing behind.
Ultimately this latest report from Juniper is a bit of a mixed bag for those hoping that mobile payments adoption would take off in the coming years. That said the increase of contactless payment acceptance can only mean good things for mobile wallets as their acceptance is also likely to rise. Additionally, zooming out to the broader FinTech sector, there are surely plenty of opportunities for startups to capitalize on the growing contactless trend and continue to disrupt the evolving payments space. In the meantime expect both OEM Pay and third-party options to duke it out and to experiment with new ways to grow their userbases.