By 2016 the number of mobile wallets using contactless technology is expected to reach 200 million, representing growth of more than 100% from the end of 2014.
This is according to Juniper Research's recent study, which notes while historic growth of mobile wallet usage was driven by person-to-person services for the unbanked in developing markets, the launch of Apple Pay has prompted a hive of activity in the contactless arena.
It argued that with public awareness of contactless technology heightened in the wake of Apple's launch, competing services such as Samsung Pay and the forthcoming Android Pay would no longer need to seed the market.
According to Arthur Goldstuck, MD of World Wide Worx, Apple Pay is the first mobile payment implementation that one could regard as going mainstream.
Its initial roll-out may not have made it ubiquitous, but it was a dramatic proof of both capabilities and the need for the service, says Goldstuck.
"Once Samsung Pay competes directly with Apple Pay in all markets, and Android Pay enters global markets, we will see true stimulation of the industry, but possibly also great consolidation."
Goldstuck says at present there are numerous fragmented solutions that could become irrelevant once the technology becomes standard with all phones.
"In SA, mobile wallets are still a very limited option, as there is no direct support for Apple Pay or Samsung Pay. Android Pay is also not likely to be SA-friendly at launch, but in time all of these will become universal."
At the moment we are seeing an explosion of contactless cards for access purposes, but not yet as much for payments in South Africa, says Goldstuck.
We are more likely to see bank-partnered than bank-led mobile wallets, he notes, adding if every bank has its own solution, we would once again see the kind of fragmentation that prevented the market from taking off in the first place.
At present we have credit cards that can be used for contactless payments at supporting merchants, for example Investec's cards in SA, says Goldstuck. However, the merchant ecosystem is not yet developed, he adds.
Jeremy Osborne, Africa field marketing manager for Telecom solutions at Gemalto, says Apple Pay along with Samsung Pay initiatives are further supporting existing near field communications (NFC) deployments around the world and will further boost end-user adoption, reinforcing momentum around mobile contactless payment.
Although no national deployments have taken place as yet, all major banks in South Africa are testing different contactless-based technologies, adds Osborne.
"Widespread acceptance of NFC and contactless payments by retailers is of course critical to the adoption and usage of NFC-based payments by consumers."
The latest report from market analyst Strategy Analytics, forecast that payments made via NFC-enabled mobile handsets will account for $130 billion in worldwide consumer retail spend by 2020.
However, for contactless mobile payment to go mainstream, setting up the right infrastructure is key, which means equipping the field with both NFC handsets and NFC-compliant point of sales payment terminals, concludes Osborne.
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