Almost 2.1 billion consumers worldwide are expected to use mobile wallets for payments or money transfers by next year, representing growth of almost 30% over the 1.6 billion consumers who used mobile wallets last year, according to a new study from Juniper Research.
PayPal was cited by Juniper as having "the greatest opportunities to develop a converged wallet on a worldwide basis" in the next five years, but China's Alipay was mentioned as a close second for global market leadership, with WeChat Pay, Alipay's rival in China, coming in third.
The report also suggested that most markets around the world will see a mix of both QR code-based contactless mobile payment options — the type used by retailers such as Walmart and Starbucks — and NFC-based mobile payments.
There are many mouths to feed in the mobile payments market, not just the likes of PayPal, Alipay and WeChat, but also Apple Pay, Android Pay, Samsung Pay and others — and that list doesn't even count the so-called "closed loop," self-branded mobile payments offerings from retailers like Walmart, Target, CVS and Starbucks.
Juniper's anticipation of 2.1 billion mobile payments users by next year suggests the market is looking a bit healthier than it did a year ago when a study from PYMNTS.com and InfoScout suggested that consumer adoption had slowed.
Many of the players in this market are huge and have already established a global reach in one way or another, but one of the things that makes PayPal a good bet for worldwide leadership is its ability to be a consolidated mobile wallet not tied to a single payment brand, but containing many, allowing consumers to use any card or mobile payment account they have stored with PayPal at any given time.
In terms of payment volume, PayPal has more experience processing mobile payments than other providers, and has partnered with everyone from the major credit card companies to Google and even Alipay parent Alibaba to make sure it has the broadest possible utility. The company has also finally started to use Venmo as something more than a social media-friendly money transfer platform. The concept of a universal mobile wallet has been elusive, but PayPal gets as close as anyone.
Still, there may be some wild cards yet to be played by other mobile payments providers. For example, Amazon appears poised to expand its financial services offerings, and mobile payments certainly could play a bigger role. Also, Walmart to date has not had much motivation to expand Walmart Pay outside of its own stores, where the primary value lies in enhancing customer loyalty. But it's hard to imagine Walmart yielding mobile payments in the U.S. and elsewhere to Amazon, Google or Apple, the latter of whom it spurned when it had the opportunity to accept Apple Pay in stores.
There is a lot left undecided in the mobile payments market, and greater customer adoption should only raise the stakes for retailers.