According to key findings in the report, following years of largely unsuccessful pilots and commercial launches in Europe, tech giants have come with their own strategy and vision of how mobile payments should be organized. The ‘Pay’ companies have moved further, skimming the cream from already mostly implemented and ready contactless payments infrastructure. As they are steadily following their mWallet market vision and implementing their mPayments strategy in the US, tech giants’ mWallets will likely be effective in Europe as well.
The report finds that even if the card and mobile payments industry is set to see lower revenues with introduced interchange cap regulation in the region, the total mWallet revenue for the payments industry is forecasted to demonstrate a CAGR of 50% over the 2016-2021 period, surpassing the EUR 1 billion bar by 2021.
This report, titled “mWallets to meet European adoption,” has been produced combining long-standing experience and unique positioning in the secure transactions industry with interviews with key players in the mobile payments industry. It is an essential tool to all stakeholders in secure transactions and payments industry.
- Executive Summary
1. Card payments ecosystem
1.1.1. Card types
1.1.2. Card transaction types
1.2. Card payments flow
1.2.1. Card payments transaction models
1.2.2. Credit card payments services
1.2.3. Visa transaction sample
1.2.4. Debit/prepaid card payments services
1.3. Card payments value chain
1.3.1. Card issuers
1.3.2. Card acquirers
1.3.3. Card payments processors
1.3.4. Card networks
1.3.7. Card payments acquisition value chain
1.4. Card payments economics
1.4.1. Merchant service fee
1.4.2. Network fee
1.4.3. Interchange fee
1.4.4. Acquiring economics
1.4.5. Issuer economics
1.4.6. Cross-border card economics
2. Card payments markets
2.1. Card acceptance
2.2. Mobile acceptance
2.3. US payments market
2.3.1. US payments acceptance
2.3.2. US card schemes
2.3.3. US card payments processors
2.3.4. US regulation
2.3.5. US interchange fees
2.4. UK payments market
2.4.1. UK card payments acceptance
2.4.2. UK card schemes
2.4.3. UK card payments processors
2.4.4. UK regulation
2.4.5. UK interchange fees
2.5. EU-wide payments market
2.5.1. EU card payments acceptance
2.5.2. EU countries national card schemes
2.5.3. EU countries international card schemes
2.5.4. EU countries card payments processors
2.5.5. EU regulation
2.5.6. SEPA for cards
2.5.7. EU-wide card scheme
2.5.8. EU interchange fees
2.5.9. EU interchange cap outcome
2.6. US-EU market comparison
3. Mobile wallets
3.1. What is a mWallet?
3.1.1. Near Field Communication
3.1.2. Secure element
3.1.4. US-EU smartphones market comparison
3.2. Apple Pay
3.2.1. Apple Pay business model
3.2.2. Apple Pay security
3.3. Android Pay
3.3.1. Android Pay business model
3.3.2. Android Pay security
3.4. Samsung Pay
3.4.1. Samsung Pay business model
3.4.2. Samsung Pay security
3.5. mWallets on wearables
3.6. mWallets in US
3.6.1. Apple Pay acceptance & value chain
3.6.2. Android Pay acceptance & value chain
3.6.3. Samsung Pay acceptance & value chain
3.6.4. CurrentC and other mWallets
4. mWallets in Europe
4.1. EU mWallets market history
4.2. EU mWallets acceptance
4.3. mWallets in the UK
4.3.1. Apple Pay in the UK
4.3.2. Android Pay in UK
4.3.3. Samsung Pay in UK
4.4. mWallets in Europe
4.4.1. Apple Pay in Europe
4.4.2. Samsung Pay in Europe
4.5. EU mWallets business models
4.6. EU alternative mWallet billing
4.7. EU other mWallets
5.1. NFC-enabled device shipments in EU, 2016-2021
5.2. mWallet users in EU, 2016-2021
5.3. mWallet penetration in EU, 2016-2021
5.4. mWallet transactions in EU, 2016-2021
So far, banks and mobile network operators have also plunged into payments by introducing mobile wallets as a payment tool. Mobile wallets are essentially digital versions of traditional wallets that someone would carry in their pocket. However, none of them has actually largely succeeded.
Many companies are jumping into the mobile payments space, on both the paying and receiving sides of the transaction, and new innovators are continuously changing the industry. On a global perspective, mobile wallets are enabling economies to transition to a cashless society.
At the same time, on the other side of the Atlantic Ocean, big projects were also pushed to the market, including ISIS, Softcard, Google Wallet. In spite of huge investments earmarked for these projects, they did not succeed either.
Nevertheless, on the wave of mWallet pilots all over the world, which pushed the expansion and wide adoption of contactless technology, new entrants have come with their own vision of the mWallet market.
The major tech giants, such as Apple, Google and Samsung, to name few, all have solutions of their own: Apple Pay, Android Pay and Samsung Pay. Internationally, still more companies are developing and launching new technologies in this space.
The ‘Pay’ companies have moved further, skimming the cream from already mostly implemented and ready contactless payments infrastructure. Indeed, while being initially launched in their home markets, tech giants-lead mWallets are being exported to other lucrative markets, especially to Europe. Moreover, as they are successfully following their mWallet market vision and implementing their mPayments strategy in the US, tech giants’ mWallets will likely be effective in Europe as well.
Although tech giants have already had their mWallets tested and marketed in their home markets, it would probably be more difficult to achieve the same in Europe. Highly fragmented European payments market without doubt is set to hinder tech giants’ mWallet proliferation.
Nonetheless, even if the EU does not still has a common card payments processing and acceptance market, Europe is home to countries with the highest rate of contactless technology penetration. Along with well-established mWallet practices and new cloud solutions, high penetration of contactless acceptance points will spur the tech giants’ mWallet adoption.
According to our estimations, the fact that Android OS (Samsung Pay along with Android Pay) will account for a large share of the handsets sales in 2021 translates into mWallet adoption, as Android-based mWallets will account for 71.4% of the total number of mWallets in the EU. In contrast, the limited marketshare of Apple Pay will constrain its access to the mWallet market in the EU as by 2021 Apple Pay will represent only 13.5% of the total amount of mWallets.
At the same time, moving from card infrastructure to mobile, the payments ecosystem remains virtually the same. However in Europe, the card payments industry revenue goes down and new entrants are not welcomed.
Nevertheless, even with interchange fees capped by the EU legislation, the mPayments market still remains of great interest for tech companies and especially for global expansion of ‘Pay’ mWallets.
Globally, the number of mWallet transactions in the EU will experience a CAGR of 61.8% over the forecast period. The total mWallet revenue for the payments industry is forecasted to demonstrate a CAGR of 50% over the 2016-2021 period, surpassing the EUR 1-billion bar by 2021.