Mobile payments market will undergo huge transformation in next five years
The person-to-person (P2P) mobile money transfer space is about to be hit by a wave of disruption and innovation, according to a new m-payments forecast by Ovum.
The global user base for person-to-person (P2P) mobile money transfers will increase from 192.66 million users in 2014 (domestic and international) to 1.61 billion in 2019, Ovum says.
On top of this, the total global user base for mobile payment segments will increase from an estimated 689.99 million users in 2014 to 4.77 billion users in 2019. This forecast also covers m-commerce and mobile proximity payments.
P2P domestic transfers drive users, international drives value
The total global transaction value generated by P2P mobile money transfers will increase from $15.22bn in 2014 to $270.93bn in 2019, Ovum finds. P2P domestic transfers will eclipse international remittances in terms of the number of users, but the inverse is true when it comes to transaction value, with international remittances being the bigger value generator, Ovum says.
P2P domestic transfers are characterised by high-volume, smaller-value transactions, particularly in emerging markets where they continue to be the most widely used type of mobile money service, says Ovum.
New competition could shake up the market
Ovum expects the P2P mobile money transfer market to transform over the next five years. “The market for P2P mobile money transfers will be shaped by a new wave of players that will drive innovation and disruption going forward,” says Eden Zoller, Ovum principal analyst consumer services and payments.
Key players include popular OTT messaging applications adding money transfer capabilities such as Facebook Messenger, KakaoTalk, and Line.
Although mobile adds new levels of convenience to international remittances and can potentially lower costs, mobile is still a small part of the overall remittance market. “The traditional remittance market is highly entrenched and has been characterised by lack of innovation. Mobile has the potential to really shake things up and introduce new levels of competition,” says Zoller.