GLOBAL MOBILE PAYMENT MARKET

1

Sample Global Mobile Payments – Market Study

GLOBAL MOBILE

PAYMENT MARKET

Base Year: 2017

Forecast Period: 2018-2023

Domain: ICT

Sample

2


GLOBAL MOBILE

PAYMENT

MARKET

By Type

Proximity Payments

Remote Payments

By End-user Industry

BFSI

IT and Telecommunication

Retail

Healthcare

Government

Media and Entertainment

Travel and Hospitality

Transportation and Logistics

By Region

North America

Europe

Asia-Pacific

Latin America

Middle East & Africa

SCOPE OF THE STUDY

3


TABLE OF CONTENTS

1. Introduction

1.1 Scope of the Study

1.2 Study Deliverables

2. Research Approach and Methodology

3.Executive Summary

4. Market Dynamics

4.1 Market Overview

4.2 Introduction to Market drivers and Challenges

4.3 Factors Driving the Market

4.3.1 Increasing Internet Penetration and Growing M-commerce Market

4.3.2 Increasing Number of Loyalty Benefits in Mobile Environment

4.4 Factors Restraining the Market

4.4.1 Security Issues Associated with Mobile Payments

4.5 Market Opportunity

4.6 Industry Attractiveness – Porter’s Five Forces Analysis

4.6.1 Bargaining Power of Suppliers

4.6.2 Bargaining Power of Consumers

4.6.3 Threat of New Entrants

4.6.4 Threat of Substitute Products or Services

4.6.5 Competitive Rivalry among Existing Competitors

5. Global Mobile Payment Market Segmentation - By Type

5.1 Proximity Payment

5.2 Remote Payment

6. Global Mobile Payment Market Segmentation - By End-user

Industry

6.1 BFSI

6.2 IT & Telecommunication

6.3 Retail

6.4 Healthcare

6.5 Government

6.6 Media & Entertainment

6.7 Transportation & Logistics

6.8 Others

4


7. Global Mobile Payment Market Segmentation - By Region

7.1 North America

7.2 Asia Pacific

7.3 Europe

7.4 Latin America

7.5 Middle East & Africa

8. Competitive Intelligence – Key Vendor Profiles

9. Investment Scenario

10. Future of the Market

TABLE OF CONTENTS

5


MARKET OVERVIEW – GLOBAL MOBILE PAYMENTS MARKET

• The landscape of mobile payment across the globe is changing rapidly owing to

unsettling digital transformation. The technological advancement in smartphone has

enabled on-the-go fund transfer and POS at retail terminals which is fueling the global

market growth.

• Mobile payment platforms, such as Tencent based in China, have witnessed robust

growth in active user base, with more than 600 million users (as of 2016).

• The stores and services across the globe are rapidly adopting and integrating mobile

payment applications, such as PayPal, Samsung Pay, Apple Pay, AliPay and WeChat

Pay, to accept payments. Owing to changing lifestyle, daily commerce, and rapid

growth in online retailing, this trend is expected to continue over the next six years.

• The most common medium of payment is through projecting QR code at the shop,

wherein small-scale local shops also accept mobile payments.

• The growth of mobile payment can be attributed to a robust user base of

smartphones, the growth of which is expected to propel the growth of the market

studied, during the forecast period.

• Notably, the companies are rigorously investing in the mobile payment technology

owing to significant growth in the industry. For instance, in Indian market, WhatsApp is

working with ICICI bank to introduce mobile payment feature through UPI( unified

payments interface)

• Mobile payments are utilized for diverse operations, including ordering

takeaway food, movie tickets, and smartphone game upgrade, which is

expected to propel the market’s growth during the forecast period.

• The usage of debit or credit card across the developed and developing

nations is ascending thereby fueling the growth of the market studied.

• According to the Payment and Clearing Association of China, the

number of non-banking mobile application transactions increased to

USD 97 billion in 2016, from USD 3.8 billion in 2013, which is likely to

boost the growth of the market studied, over the forecast period.

• However, despite the rising benefits and applications, the number of

frauds is also on the rise, owing to which the People’s Bank of China

(PBOC), the central bank of China, planned to impart a cap over

mobile expenditure, which might significantly hinder the market in the

country.

• In December 2017, China regulated the barcode payment system

capping the payment to USD 76 (if paid through QR/ barcode), with

additional verification checks put in place for transactions exceeding

the said amount, which may hurt the significant industry players’

financials.

6


• Owing to the growth of the retail industry and benefits offered by the third-

party applications, the transaction value of mobile payments in China has

increased by about 38% in 2017, as compared to 2016. Further, the market

studied is largely dominated by Alipay and Tenpay and the scenario is

expected to remain the same, during the forecast period.

• Furthermore, the introduction of Apple Pay, particularly in retail sector will

have a tremendous impact on the country’s market growth.

• The transaction volume of mobile payments in the US was recorded about

USD 115 billion in 2016 and is expected to increase at a significant rate.

• The mobile payment method is being adopted by diverse retailers to ease

the payment mode and is becoming mainstream in the industry. For

instance, in Q4 2016, Starbucks witnessed about 27% of the total income

made through mobile payments.

MARKET OVERVIEW

58.8

81

2016 2017

Mobile Payment Market: Transaction Volume in CNY

trillion, China, 2016 – 2017

* Comparison drawn for the first 10 months

7


THREAT OF NEW ENTRANTS

XX

THREAT OF SUBSTITUTES

XX

XXBARGAINING

POWER OF THE

CUSTOMERS

Porter’s five forces model studies the five identified competitive forces that shape

every industry and market, to determine the intensity of competition, and thus, the

profitability and attractiveness of the industry. The objective of a growth strategy

should be to adapt to these competitive forces in a way that improves the position

of the organization. This study includes an exhaustive Porter’s five forces

framework, incorporating the factors influencing each force, to analyze the market

from a microeconomic perspective.

In the study, Porter’s five forces are analyzed, by taking into consideration the

factors influencing each force and quantifying the factors through primaries and

quantitative analysis. The quantified factors are further mapped, to derive the

impact of each force on the competitive dynamics.

*Threat of New Entrants:

The analysis of this force is carried out by considering several influencing factors,

such as government policies, capital requirements, economies of scale,

economies of product differences, product differentiation, switching costs, sunk

costs, access to distribution, and industry profitability. Following the quantification

and rating of each factor, the data is scrutinized to derive the impact of the force

on the market dynamics, on a scale of low-high-medium.

*Sample Example

PORTER’S FIVE FORCES ANALYSIS

SAMPLE CHART

XX

COMPETITIVE RIVARLY

XXBARGAINING

POWER OF THE

CUSTOMERS

8


BFSI IT & Telecommuni

cation

Retail Healthcare Government Media & Entertainment

SEGMENTATION - BY END-USER INDUSTRY

In the BFSI sector,

mobile payments

find applications in

online financial

transactions or fund

transfers.

WeChat payment is

widely utilized to

make doctors’

appointments and

conduct online

transactions to pay

the fees.

In the retail industry,

mPOS is widely used

to perform

transactions and

purchase goods,

which is likely to

boost the market

studied.

In the government

sector, mobile

payments are used

to pay utility bills

and related

transactions.

In the IT &

Telecommunication

industry, mobile

payments are used

to make transactions

associated with the

telecom providers.

In the media &

entertainment

industry, paid

content is accessible

through payments

that are usually

facilitated through

mobile devices,

which are the

primary sources of

transaction.

9


SEGMENTATION - BY END-USER INDUSTRY

Mobile Payments Market: Transaction

Value Share, by End-user Industry, Global,

2017

Banking and Financial Services IT and Telecommunications

Retail Life Sciences (Healthcare)

Government Services Media and Entertainment

Travel and Hospitality Transportation and Logistics

End-user Industry 2017 2018 2019 2020 2021 2022 2023 CAGR (%)

Banking & Financial Services XX XX XX XX XX XX XX 20.9

IT & Telecommunications XX XX XX XX XX XX XX XX.X

Retail 216.12 XX XX XX XX XX XX XX.X

Life Sciences (Healthcare) XX XX XX XX XX XX XX XX.X

Government Services XX XX XX XX XX XX XX XX.X

Media & Entertainment XX XX XX XX XX XX XX XX.X

Travel and Hospitality XX XX XX XX XX XX XX XX.X

Transportation and Logistics XX XX XX XX XX XX XX XX.X

Mobile Payments Market: Transaction Value in USD billion, by End-user Industry,

Global, 2017-2023

SAMPLE FIGURE

10


SEGMENTATION - BY END-USER VERTICAL - BFSI

Year

2017 2018 2019 2020 2021 2022 2023

Reve

nu

e (

in U

SD

bill

ion

)

• Owing to rising usage of internet banking and increasing fund transfers through banking

services, the banking and financial institution (BFSI) segment is witnessing a surge in

transaction volume through mobile payment.

• Innovation in financial services, coupled with rapid growth in internet infrastructure, has

propelled the utilization of smartphones, thereby fueling the growth of the market studied.

• In addition, the top banks across the globe along with the government have been

pushing consumers to utilize bank mobile payment options, which are expected to fuel

the market’s growth, during the forecast period.

• The banks are marketing their mobile payment mode by offering reward points and

attractive cash back offers capped at a specific amount to the consumers which is likely

to foster the market growth.

• Moreover, the banking payment application are operational and offer support 24*7 which

gives an edge its competitors. This is ascending the growth of users for banking services

thereby fueling the market studied.

• According to the People's Bank of China (PBOC), in 2017, the banking institutions

experienced a growth of around CNY 203 trillion, a growth of approximately 28% from

2016, which is likely to boost the growth of the market studied, during the forecast

period.

Mobile Payments Market: Transaction Value in USD billion,

BFSI, Global, 2017-2023

SAMPLE FIGURE

11


SEGMENTATION - BY GEOGRAPHY

North America

• United States

• Canada

Europe

• United Kingdom

• France

• Germany

• Russia

• Italy

• Spain

• Rest of Europe

Latin America

• Argentina

• Brazil

• Mexico

• Rest of Latin

America

Asia-Pacific

• China

• India

• Japan

• South Korea

• Rest of Asia Pacific

Middle east and

Africa

• United Arab

Emirates

• Saudi Arabia

• South Africa

• Rest of Middle

East & Africa

12


ASIA-PACIFIC

China

India

Japan

South Korea

Rest of Asia-Pacific

13


ASIA-PACIFIC

Mobile Payment Market: Transaction Value

Share, by Country, Asia-Pacific, 2017

China India

Japan South Korea

Rest of Asia-Pacific

Country 2017 2018 2019 2020 2021 2022 2023 CAGR (%)

China XX XX XX XX XX XX XX XX.X%

India XX XX XX XX XX XX XX 38.7%

Japan XX XX XX XX XX XX XX XX.X%

South Korea 30.57 XX XX XX XX XX XX XX.X%

Rest of Asia-Pacific XX XX XX XX XX XX XX XX.X%

Mobile Payment Market: Transaction Value in USD billion, by Country, Asia-Pacific, 2017-2023

SAMPLE FIGURE

14


CHINA

• Chinese customers are adopting cashless payment methods rapidly, leading to

highest transaction volumes in the country, in 2018. They have been the fastest

adopters of online retail, financial, and on-demand services, and predominantly

use mobile payments, due to its superior convenience.

• Due to the increasing prominence and ease of use of mobile payments, about 40%

more transaction volume was witnessed in the first ten months of 2017 than 2016.

• The mobile payment market in the country is led by AliPay and WeChat Pay,

owned by Ant Financial (Alibaba parent company) and Tencent Holdings,

respectively. Moreover, money in the country flows through a digital system that

blends social media, commerce, and banking.

• In addition to this, WeChat Pay is the major mobile payment method for small-

scale daily transactions in China. As of 2017 Q1, Weixin and WeChat, combined,

had a monthly active user base of 938 million users, a 23% year-on-year increase.

• In addition to this, mobile payment transactions are set to propel further increase

as more than 600,000 villages in China are going cashless.

• Limited credit card use and the centralized nature of China’s e-commerce market

have facilitated the rapid expansion of mobile payments in China.

Mobile Payment Market: Transaction Value in USD billion,

China, 2017-2023

Year

337.59

683.44

0.00

200.00

400.00

600.00

800.00

1000.00

1200.00

2017 2018 2019 2020 2021 2022 2023

Tra

nsaction V

alu

e (

in U

SD

bill

ion)

Source: Ministry of Industry and Information Technology

Mobile payment reached CNY 81 trillion in

2016 from CNY 58.8 trillion in 2015.

15


CHINA

• The e-commerce sector in China is expected to register a high growth, due to the proliferation of

mobile payments and the presence of key players, such as Alibaba, JD.com, and Tmall. The use

of online payment methods is rising due to the convenience of mobile shopping and increased

spending by consumers, specifically in smaller cities and rural areas.

• Mobile payment penetration in the country has moved beyond retailing, as Union Pay, a Chinese

financial services corporation, is working with Guangzhou Metro to enable public transport users

in the city to pay fares with QuickPass, a UnionPay mobile payment application.

• Similarly, Shanghai Metro announced plans to stop using cash for payments and use QR code

mobile payment, a payment gateway supported by Alipay and China UnionPay. Also, China is

home to three of the top 10 largest metro networks in the world. With work for metro rail

networks in nine cities across the country already in progress, the use of mobile payments is set

to increase. Thus, the introduction of mobile-based payments in upcoming networks and their

use in other existing ones is set to drive growth in the mobile payment market.

125.48

217.39

357.71

469.2

527.03

2013 2014 2015 2016 2017

Source-CNNIC

Mobile Payment Users in million, China, 2013-2017

• However, concerns regarding security have been raised due to the use of QR code payments, in the country. Payments made by QR code can expose users to fraud.

The country has witnessed several instances related to the same.

• 2017 witnessed a string of scams involving QR codes, resulting in a spotlight on the issue of security in mobile payments. In Guangdong province, CNY 90 million were

stolen via QR code scams, raising questions regarding the security of mobile payment methods.

• In a move to resolve security issues, the People's Bank of China issued regulations over QR-code-based payments. The regulations, which became official in April

2018, limited transactions to CNY 500, 1000, and 5000 in a day for users, based on their demand and risk. This is expected to act as a major challenge for QR code-

based payments generated from mobile phones.

16


CHINA

WeChat Red Packets went viral during

China’s Spring Festival

2014

2014

Witnessed a high growth as the use of

ride-sharing services increased

2015

Opened to 3rd party developers &

service providers

2016

Announced ‘zero tech requirements’

for a lower adoption threshold

2017

Launched Open Platform and

WE Plan to support overseas

merchants and partners

WeChat Pay launched WeChat’s Smart Life Solution, which has been adopted by millions of stores in more than 30 different industries.

WeChat Pay & Smart Life

Timeline

17


• Google LLC

• Samsung Group

• Amazon.com, Inc.

• Apple Inc.

• Paypal Inc.

• Mastercard PLC

• Visa Inc.

• American Express Co.

• Mahindra ComViva

• Orange SA

• WeChat

• Alipay.com Co. Ltd

• Eserve Global

• Square Inc.

COMPETITIVE INTELLIGENCE –

COMPANY PROFILES (List not exhaustive)

18


• Alipay, founded in 2004, is a third-party online payment and mobile application established in China, by Alibaba

Group. Ant Financial is the parent company of Alipay, and in 2015, the former moved its headquarter to Pudong,

Shanghai, from Hangzhou.

• In 2013, the company overtook PayPal to be the largest mobile payment platform, globally. Further, during the fourth

quarter of 2016, the company accounted for about 54% share of the market studied.

• Through Alipay, a user can perform a diverse set of actions, such as hailing a taxi, purchasing movie tickets, taking

doctors’ appointments, paying utilities, and purchasing wealth management products.

ALIPAY – OVERVIEW

(+86) 571-2688-8888

https://www.alipay.com/

HQChina

Founded in 2004

Growth in Asia

*All Data as of 2017

Payment in 25 Currencies

+520 Million Active

Users

+200 Domestic

Financial Institution

Partners

+40 countries

+250 Overseas

Financial Institution

Partners

Major Competition

• Tenpay

19


ALIPAY – PRODUCTS AND STRATEGIES

Products & Services

Major Clients

Expansion

Strategies

Technology

• Air Asia

• Cathay Dragon

• iHerb

• Lawson

• Cross-border Online Payment

• Customs Declaration

• Barcode Payment

• Merchant QR Code Payment

• Transaction QR Code Payment

• The company is highly focused on integrating emerging technologies

into Alipay’s platform, to enhance and refine customer experience,

which is likely to eventually bolster the user base.

• In late 2017, the company rolled out Smile To Pay option at KFC in

Hangzhou, wherein facial recognition is used. This will ensure that a

chain of users are being added to the payment platform, thereby

fueling the company’s revenues.

• The company is also emphasizing on expanding its business to

diverse countries in several regions, such as Asia-Pacific and

North America.

• It is partnering with local vendors or technology partners, to

integrate the platform in the respective country, which may

ensure the expansion and awareness about the mobile payment

platform.

20


ALIPAY – SWOT ANALYSIS

• The company has a considerable presence of users on the platform, who

are using the application not only domestically, but internationally, to make

payments.

• The capital resources are backed by Alibaba Group, which helps in

expanding and investing in new technologies.

• The company has a robust collaboration with local vendors and companies

in terms of Alipay integration, which is a significant strength of the company.

• The company has a limited geographical presence, and is trying to

expand. However, currently, the company has a primary presence in

China and relies on the country for its revenue stream.

• The ubiquity of mobile applications and rapid expansion of smartphone

technologies pose an immense opportunity for the company to increase

its market penetration.

• With an increasing number of youth migrating toward online financial

transactions, the company has an edge for its products.

• The primary threat to the company is from direct market giants or

competitors, including WeChat payments and PayPal. The

introduction of new regulations associated with mobile payment and

capping can hurt the finances of the company.

• The traditional and conventional way of a bank’s online services can

replace the Alipay platform, in some transactions.

STRENGTHS

OPPORTUNITIES

WEAKNESS

THREATS

21


ALIPAY – RECENT DEVELOPMENTS

Alipay was launched in the United States, which is expected to rapidly

increase the revenue for the company, owing to increasing Chinese tourists

and residents in the country.

Oct 2017

M I E P

Mergers and

Acquisitions

Product

InnovationExpansion Partnership

E

22


Study Deliverables

Study Assumptions

Analysis Methodology

Research Phases

RESEARCH METHODOLOGY

23


STUDY DELIVERABLES

STUDY PERIOD

AIM AND OBJECTIVE OF THE STUDY

FORECAST PERIODBASE YEAR

GEOGRAPHICAL SCOPE SEGMENTS COVERED

To gain a fundamental understanding of the Chinese mobile payment market, by analyzing key market dynamics, and profiling

key vendors to structure the competitive landscape

2012-2017 2017 2018-2023

DROs

PORTER’S FIVE FORCES ANALYSIS

SEGMENT AND SUB-SEGMENT

ANALYSIS

KEY PLAYERS

COMPETITIVE LANDSCAPE

24


STUDY ASSUMPTIONS

The base currency considered was the US Dollar (USD). The conversion of other currencies to USD was considered on the basis of the average exchange

rate for the respective review period years. The exchange rate conversion for forecast period was determined according to the base year’s conversion rates.

The base year was identified on the basis of the availability of annual reports and secondary information. The base year considered for this study is 2017.

The review period considered for this study is 2012-2017. The forecast period and CAGR are for 2018-2023.

Market size estimations for the forecast years were in real terms. Inflation is not part of the pricing and the average selling price (ASP) was kept constant

throughout the forecast period, for each country.

The distribution of primary interviews conducted was on the basis of the regional share of the market and the presence of key players in each region.

As a result of data triangulation through multiple methodologies and approaches, the weighted averages of resulting estimates were considered to be the

final values.

25


S

Data Extraction Process

Data Corroboration Process

Analysis

Econometric Forecast Modelling + Secondary Research + Expert Verification

Inference

Data Generation Process (DGP)+Forecasts

Info graphic and Comprehensive Presentation of Inferences and Estimates

STUDY STRUCTURE Technology / Market Identification

Market Definitions

Key Countries and Regions

Segmentation

Mapping of Key players

Market Share Market Sizing

Company Profiles

Competitive Landscape

Porter’s Five Forces AnalysisMarket Structure

Value / Supply ChainAnalysis

Identification of Exogenous Factors

Recent Market Developments /

Competitive Landscaping

Validation of Market Size

Consumer Behaviour Analysis

Market Dynamics

Market Structure Analysis

Top-downApproach

Bottom-up Approach

Segment- and Region-wise Market

Size Forecasting

ANALYSIS METHODOLOGY

26


SECONDARY

RESEARCH

DISCUSSION

GUIDE

PRIMARY

RESEARCH

ECONOMETRIC

MODELLING

EXPERT

VALIDATION

DATA

TRIANGULATION

REPORT

WRITING

• Company Annual Reports

• Journals

• Government Publications

• Plant Managers

• Sales Managers

• Surveys

• Manager, Purchasing and

Logistics

• Industry Experts

• Consultants

• Subject-matter Experts

• In-house Experts

• Company-related Queries

• Market-related Queries

• Company Financials

• Forecasting Model

• Monte Carlo Simulation

• Revalidation of Numbers from

Secondary Through Primaries

• Combination of Top-down and

Bottom-up Approaches

• Insights from Data and

Forecasts, Compiled into

One Report

RESEARCH PHASES

SOME OF OUR CLIENTS

SOME OF OUR CLIENTS

Adding to your revenues without being a cost.

Copyright © 2015 Mordor Intelligence LLP

All Rights Reserved. This document contains highly confidential information and is the sole property of Mordor Intelligence LLP. No part

of it may be circulated, copied, quoted, or otherwise reproduced without the approval of Mordor Intelligence LLP.

+1 617-765-2493 | 5th Floor, Brigade Towers,Financial District, Gachibowli, Hyderabad - 500032,India | [email protected]

Documents

GLOBAL MOBILE PAYMENT MARKET