Analysis

Adopt contactless payments at POS BY 2020

10th April 2015
IHS
Jordan Mulcare

Ahead of Apple Pay’s expected international expansion and new services from Google and Samsung, the latest IHS report, titled Mobile operators must refine their mobile payments services in Western Europe, analyses the state of mobile payments in Western Europe, what mobile operators have done to date and what they need to do to stay relevant.

Mobile penetration and the growth of e-commerce have been driving the adoption of mobile wallets. The total smartphone installed base in Western Europe reached 331m in 2014, with a 61% smartphone penetration rate. Contactless infrastructure is getting ready. MasterCard has set 2020 as the deadline for all European merchants to adopt contactless payments at POS.

According to IHS, operators must move fast now before Apple and Google extend their dominance in the mobile payments space in Europe. Consolidation continues in the US as major players including Samsung, Google and PayPal announced payment services to rival Apple Pay. Europe will be the next combat zone, as Visa is rolling out tokenisation in Europe in April, which paves the way for Apple Pay.

Mobile operators in Western Europe have launched 36 mobile wallet services across 15 countries as of January 2015. Most of these services are less than three years old and still in their nascent stage. Western Europe is still a very fragmented market for mobile payments but contactless payments are gaining momentum. Nordic countries have the most successful non-NFC mobile payments products, while the UK leads in the implementation of contactless payments.

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