The value of mobile payments is expected to hit US$1 trillion worldwide in 2017, driven in large by increasing smartphone adoption in Asia-Pacific.
The region would lead global mobile payment developments as mobile-commerce transactions take off with more emerging markets coming online for the first time via smartphones, according to IDC. The research firm added that the "limited" adoption of credit and debit cards in some Asia-Pacific nations would see consumers linking their bank accounts to mobile wallets, hence, fueling mobile payments.
Shiv Putcha, IDC's Asia-Pacific associate research director and connected consumer marketplaces, noted that smartphone adoption had grown more rapidly than general banking and card adoption in the region.
"Recent focus on financial inclusion policies in various countries have given a boost to connecting the unbanked. This phenomenon, coupled with the innovation of semi-closed wallet schemes linked to bank accounts, has given a major boost to mobile payments in Asia-Pacific," Putcha said.
The IDC analyst explained that the region comprised mature markets such as Singapore, Hong Kong, and Australia with strong banking and card adoption. They would follow a similar path in terms of mobile payments as mature Western economies, where the focus was on location-based services based on near field communications (NFC), he said, adding that this would facilitate market offerings such as Android Pay and Apple Pay.
Emerging Asian markets , on the other hand, would likely tap "semi-closed wallets" in which consumers had to add value to their mobile wallets that were linked to their bank accounts, similar to how they would do so for a prepaid mobile account.
According to IDC, matured Asian economies would remain card payment leaders and look at mobile payments to provide more efficiencies, bypassing the need to swipe physical cards. The remaining Asian markets would view mobile payments as "a GDP booster" and to "address financial inclusion imperatives", the research firm noted. "Mobile payments in these markets will jumpstart m-commerce much like Alibaba has in China," it said.