Mobile wallets make moves in Asia (GOOG, GOOGL)

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Two major mobile wallet products expanded in Asia this week.

Android Pay launched in Singapore, making it the first country outside the US to support Apple Pay, Android Pay, and Samsung Pay. This is now Android Pay’s third market, following launches in the US and UK. 

• The wallet is available to Singaporean customers with a Visa or MasterCard issued by DBS, OCBC, POSB, Standard Chartered, and UOB. Initially, it will be available in at least 20 retail locations and 10 apps.
• The country’s developed contactless ecosystem makes it a valuable market for mobile wallets. A third of all Visa credit and debit transactions in the country are contactless. Familiarity with tapping to pay, combined with wide contactless acceptance, could make it easy for users to adopt and habitually use the service as it grows its retail footprint.   

QuickPass, China UnionPay’s HCE-based mobile wallet, launched in South Korea this week. Now, South Korean UnionPay customers with cards issued by BCcard or a member will be able to use the NFC-based solution at QuickPass-compatible point-of-sale (POS) terminals 

The expansion could allow UnionPay to grow its South Korean business. 

• UnionPay is already quite popular in South Korea — the network counts 19 million cards, and ATMs and merchants across the country accept them as a valid payment method. QuickPass could make UnionPay a more enticing option for a population that could be attuned to mobile wallets.
• Expanding popularity in South Korea could also help the platform grow abroad. Transaction volume on Korean-issued UnionPay cards in China grew 45% year-over-year (YoY), which indicates that China is becoming a more popular destination for South Korean tourists. Habituating users to QuickPass at home might make them more likely to pay with it in China or other international destinations that accept QuickPass. 

Mobile payments are becoming more popular, but they still face some high barriers, such as consumers' continued loyalty to traditional payment methods and fragmented acceptance among merchants. But as loyalty programs are integrated and more consumers rely on their mobile wallets for other features like in-app payments, adoption and usage will surge over the next few years.

Evan Bakker, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile payments that forecasts the growth of in-store mobile payments in the U.S., analyzes the performance of major mobile wallets like Apple Pay, Android Pay, and Samsung Pay, and addresses the barriers holding mobile payments back as well as the benefits that will propel adoption.

Here are some key takeaways from the report:

• In our latest US in-store mobile payments forecast, we find that volume will reach $75 billion this year. We expect volume to pick up significantly by 2020, reaching $503 billion. This reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020.
• Consumer interest is the primary barrier to mobile payments adoption. Surveys indicate that the issue is less the mobile wallet itself and more that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits.
• Integrated loyalty programs and other add-on features will be key to mobile wallets taking off. Consumers are showing interest in wallets with integrated loyalty programs. Other potential add-ons, like in-app, in-browser, and P2P payments, will also start fueling adoption. This strategy has been proved successful in China with platforms like WeChat and Alipay.

In full, the report:

• Forecasts the growth of US in-store mobile payments volume and users through 2020.
• Measures mobile wallet user engagement by forecasting mobile payments' share of their annual retail spending.
• Reviews the performance of major mobile wallets like Apple Pay and Samsung Pay.
• Addresses the key barriers that are preventing mobile in-store payments from taking off.
• Identifies the growth drivers that will ultimately carve a path for mainstream adoption.

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