Mobile payment market to reach US$780 bil. in 2017: firm

The China Post news staffDecember 29, 2016, 12:02 am TWN

The scale of the global mobile payment market is expected to reach US$780 billion by the end of 2017, amounting to an annual increase of 25.8 percent, a market research firm said on Wednesday, Dec. 28.

According to TrendForce, Mobile payment services have expanded significantly during 2016 as smartphone makers intensify their efforts to build their own payment ecosystems. At the same time, innovations and diversification in mobile payment methods have generated new demand and opportunities worldwide.

"Among the smartphone makers that are also developing their mobile payment businesses this year, Apple and Samsung are two brands that have an advantage over their competitors," said Kelly Hsieh, senior research manager of TrendForce. "Since Android has over 50 percent of the mobile OS market share worldwide, Google also has an opportunity to build up an extensive mobile payment ecosystem. Google has recently accelerated the international expansion of its digital wallet platform Android Pay and made a big step forward this December by announcing a partnership with major Japanese e-commerce and internet company Rakuten.

According to Hsieh, Japan's mobile payment has been dominated by domestic service providers and is somewhat closed off to foreign competition compared to the U.S. and China. Therefore, having Rakuten to support Android Pay's entry into the country is strategically important for Google. Users of Android Pay can now access Rakuten's e-money platform Edy, which is accepted in major restaurant and retail chains operating in Japan such as McDonald's, Family Mart, Lawson and Domino's Pizza.

Google is also working with Sony to incorporate FeliCa – an RFID smart payment solution developed by Sony – into an NFC-enabled IC card that works with smartphones. Next year, Google will further strengthen the ecosystem of Android Pay in Japan by linking it up with more payment services and financial institutions, including eMoney, Visa, MasterCard, and Bank of Tokyo-Mitsubishi UFJ.

Next year will also see significant progress being made on the development of security solutions for mobile payment. Hsieh noted that in addition to the ongoing integration of different hardware technologies in encrypted chip design, advances in encryption algorithms and multi-factor authentication methods will increase efficiency in user verification, payment confirmation and secure data transfer.

Also, NFC chips are becoming the mainstream solution in mobile payment. Chinese smartphone brands such as Huawei, Xiaomi and Meizu have launched NFC-enabled smartphones this year, thus spurring wider adoption of the technology. TrendForce estimates that over 60 percent of smartphones shipped worldwide in 2017 will feature NFC. The security and convenience that this technology brings may radically change consumers' payment habits in the future.

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Source: Mobile payment market to reach US$780 bil. in 2017: firm