There's no doubt that the global market for mobile payments is hot.
Nearly 5 billion people worldwide use smartphones, and in 2016 alone they spent an estimated $620 billion on their devices. That's growth of nearly 40% year-over-year,  and the total market could surpass $1 trillion by 2019. Digitally-savvy consumers are increasingly demanding, and quickly adopting a wider variety of mobile payment options.
Growing alternatives to payment card networks
Many mobile payment options still utilize the dominant global payment card networks, such as Visa, MasterCard, or American Express. For example, most forms of contactless payment are still reliant on embedding the payer's card information, or a secure token to access it, into a device such as a watch, phone, or car. Payment methods that rely on the dominant payment providers still account for 45.2% of the total global eCommerce market. 
In many developing markets, cash is still king and bank accounts can be cumbersome. So, the remaining 54.8% of the total global eCommerce market is filled with a smattering of what's called “alternative payment options.” These are methods of payment that don't rely on the world's most dominant global payment networks. There are now more than 300 alternative payment options around the world—a sure sign of fragmentation, which is a major challenge for the industry.
To help you keep tabs on what's truly poised for growth in the countries that you do business in, here's a primer on the more popular types of alternative payments and their adoption around the world.
The fastest-growing methods of alternative payment
Type of Payment and Definition:
eWallets: Enables a consumer to digitally link to a payment type, then make a purchase using either stored value or direct funds.
Bank Transfers: Consumers can pay for goods via online banking or offline reference numbers.
Cash on Delivery: Country-specific systems where consumers can pay upon delivery of their purchased goods or services.
PrePay: Enables consumers to use a pre-paid card or voucher to make purchases.
PostPay: Consumers can pay for purchased goods or services in-person at an affiliated outlet or store, after receipt.
Emerging Technologies: This category includes a variety of nascent markets and products that offer different options to the consumer. For example, BitCoin is a cryptocurrency, or a digital currency designed to operate independently of a central bank. BOKU is a mobile carrier billing system, where charges are added on to the consumer's existing monthly carrier bill.
Direct Debits: The consumer authorizes a creditor to debit a customer's account directly. This method is popular for regular, recurring payments such as subscriptions.
eInvoices: Much like a traditional bank loan, consumers are given a period of time in which they pay digitally for their purchase.
Snapshot: Global Trends in Mobile Payments
Europe, Middle East, and Africa (EMEA):
India is arguably the hottest market for mobile payments in the EMEA region, but there's one big barrier: only 25% of the population can currently pay online. Still, the Indian market for mobile payments is expected to quadruple by 2020, resulting in a boom in eWallet adoption. Current projections estimate that the total mobile payment market in India could reach $5.1 billion by 2020.
An increase in internet access is driving growth in Russia, too. This market is experiencing exceptionally high smartphone adoption, which is facilitating growth in both eWallets and cash on delivery services.
Of the developed European countries, Norway is the fastest-growing market for eCommerce—and with eCommerce growth comes mobile commerce growth. eWallets are currently the most popular, and e-invoicing services are poised for growth.
M-Pesa is the most well-known example of mobile payments in Africa. Today, more than two-thirds of Kenyans regularly use their phones to make or receive payments, according to Pew Global
. There are more than 20 million registered M-Pesa customers, reaching more than 40% of Kenya's population.
South Africans have been skeptical about the security of mobile commerce to date, but that may be changing. In 2015, about 27% of South African mobile phone users made payments via a mobile device.
Latin America (LATAM):
In Brazil, mobile payments more than doubled between 2014 and 2015—from 21% of the eCommerce market to 45%. Many Brazilians pay via Boleto, a popular postpay system. Brazilians can use their Boletos to pay for services in-person at affiliated payment locations around the country. PayPal and bank transfers are also popular in Brazil.
Following closely behind Brazil in LATAM is Mexico, with the second-largest retail eCommerce market in Latin America. The number of people who made online payments in Mexico nearly doubled between 2010 and 2014. Much like Brazil, PayPal, eWallet, and bank transfers are currently popular in Mexico.
In the United States 46% of adults have made one or more mobile payments in the last year. Direct deposit (frequently referred to as ACH) and bank transfers are still most popular by volume, but eWallets are growing.
PayPal has been the most popular eWallet, and was used by 43% of shoppers at its height in 2014. Apple Pay and Google Wallet are growing in popularity, however, slower than expected adoption of Apple's service in particular have some analysts and investors skeptical of its potential.
China is the world's biggest market for mobile payments, and nearly two-thirds of all Chinese mobile phone users used mobile payments in 2016, a 30% increase over 2015.
eWallets such as Alipay, Union Pay, and WeChatPay are the most popular. Alipay, an eWallet service launched by Chinese e-commerce giant Alibaba Group in 2004, served 450 million active users in 2015, including 120 million outside of China. The group aims to grow to more than 2 billion global users in the next five to ten years.7
Know your customers, grow your business
Overall, internet adoption is increasing globally, fueling growth in mobility. This means that consumer demand for both eCommerce and mobile payment options is likely to grow. What's more, digitally-savvy, millennial consumers are increasing their purchasing power—and it's clear that they enjoy flexible payment methods.
It's certainly fun to think about what might be possible in the future. For example, Alibaba has already begun work on a system that would allow virtual reality (VR) users to buy products simply by nodding their heads. However, in such a rapidly-growing and fragmented industry, it's important to stay grounded in what's truly trending today—and what's relevant for your business.
At the minimum, strive to make payment options as mobile-friendly as possible. More importantly, you need to know your customers in order to meet their business needs. Understanding your customers' preferred methods of payment is an important piece of that puzzle.
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