Money makes the world go round; and without the instrumentality of money, the world would probably still be stuck in the age of trade by barter. In today’s age, the global economy has grown into a greater degree of interconnectivity and there’s an unprecedented need for solutions to facilitate the transfer of value from one end to another end.
Interestingly, the growth of mobile technology with the proliferation of smartphones, tablets and smartwatches is introducing another dynamics to the operations of the financial services industry globally. A BI Intelligence reports submits that the global market for peer-to-peer transfers and remittances is currently worth more than $1 trillion.
Now, money transfer apps are driving the ease of transferring money easily, faster, and at an incredibly cheap cost. There are more than 50 apps currently fighting to gain significant market share in the global money transfer market. This piece provides insight into some key developments in the global mobile money transfer market.
Data don’t lie, mobile money transfer is huge
There’s a huge paradigm shift already underway as more people start to embrace the idea of making mobile money transfers. More and more people are having reasons to avoid going through the long route of using a cheque book, looking for the nearest ATM, or actually going to a bank to make an in-person deposit. Analysts at Ovum, a global technology research and advisory firm submits in their m-payments forecast that about 1.6 billion people will be making peer-to-peer mobile money transfer by 2019.
The analysts also opine that the transaction value of global peer-to-peer payments will soar from $15.22 billion in 2014 to a massive $270.93 billion by 2019. Interestingly, international remittances and money transfers will be the biggest drivers of growth in the industry.
In the U.S., analysts at Packaged Facts submit that about $23 billion was transacted at physical retail locations from mobile wallets in 2016. Smart Insights submit that in Europe, the mobile payments market is on track to cross the 1 billion Euro threshold in the next five years.
In another report TrendForce researchers submit that the mobile payment market grew 387% from $450 billion in 2015 to $620 billion in 2016.The major driver for growth in mobile payments could be traced to products fintech being launched by mainstream tech firms such as Google Wallet, Apple Pay, and Samsung Pay.
Going forward, Eden Zoller, Principal Analyst, Consumer Services and Payments, at Ovum submits that “The market for P2P mobile money transfers will be shaped by a new wave of players that will drive innovation and disruption going forward”.
Bitcoin could trigger a bigger disruption in the global payments market
Bitcoin is one of the most interesting disruptors of the last two years – the effects of its disruption are still reverberating through the financial, economic, political, and investment markets. It is fundamentally a decentralized form of money – Bitcoin is simply money created without the authorization or backing of government.
Bitcoin is yet to make a dent in the global payments industry; however, you can expect the cryptocurrency to cause a disruption of epic proportions when Bitcoin gains the critical mass for mainstream adoption. To begin with, Bitcoin transfers happen entirely peer-to-peer without the need for the intermediary of a third party to verify or process transactions. In addition, Bitcoin has the potential to drive an increase in digital transfer of money especially for micro transactions the transaction costs will be practically negligible.