North America Mobile Wallet Market size surpassed USD 23 billion in 2019 and is anticipated to expand at a CAGR of 16% between 2020 and 2026. In 2019, the North America mobile payment transactions amounted to nearly five billion in volume and over USD 160 billion in value.
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The North American mobile wallet industry growth can be attributed to the strong hold of mobile banking channels in the region with both individual and corporate users. Customers from North America are the world’s heaviest users of digital payment channels. The widespread adoption of mobile technology in matured markets of the U.S. and Canada has allowed banks and Fintech players to target millennial consumers through mobile banking solutions. Banks are developing low-cost, basic services for these customers using branchless banking enabled by point-of-sale and simple mobile payment technologies.
The closed mobile wallets will register a growth rate of 20% during the forecast timespan. The presence of several data security issues associated with mobile wallets offered by third-party vendors is encouraging ecommerce players and device manufacturers to launch their own closed mobile wallets. Most mobile wallet players do not possess a risk mitigation plan and do not have cyber insurance, making them highly vulnerable to enormous financial losses in case of cyber-attacks. This has induced a gradual shift of consumers toward closed mobile wallets with necessary security infrastructure to protect from the evolving cybersecurity threats.
In the ownership segment, banks are set to observe around 15% growth rate from 2020 to 2026. The need for enhanced customer experience is driving the mobile wallets growth in the banking sector. The financial establishments are embracing mobile wallets to improve their customer relationship, customer retention, and position their payment cards as top wallets. The rapidly changing financial landscape of banking establishments is adopting various mobile wallets to optimize customer experience.
The Canada market revenue for mobile wallet is estimated to grow at more than 20% CAGR through 2026. The financial establishments in the country are offering a wide range of products & services and a number of ways to access these services. The consumers in the region are adopting various digital banking channels. It is estimated that over two-thirds (68%) Canadians do most of their banking digitally using online and mobile banking. Branch and ATM banking are declining in popularity over time across Canada, and mobile payments are gradually becoming valued methods of conducting a wide variety of banking transactions.
Some of the leading companies operating in the North America mobile wallet market include Amazon.com, Inc., American Express Company, Apple Inc., AT&T Inc., Due Inc., First Data Corporation, Google LLC, J.P. Morgan Chase & Co., Mastercard Incorporated, PayPal Holdings, Inc., Visa Inc, and Wells Fargo & Company.
Key vendors are forming partnerships with various merchants to increase the usage of mobile wallet offerings. The device manufacturers and banking establishments, such as Chase Pay and Apple, are providing lucrative offers to increase the usage of their mobile wallets across various ecommerce platforms and merchants. For instance, in October 2020, PayPal launched a new service that allowed its customers in the U.S. to buy, hold and sell cryptocurrencies directly through their PayPal wallet. The strategy comes as a key initiative amid the COVID-19 pandemic with rising interest of central banks and consumers on digital currencies. PayPal also announced its plans to promote the use of cryptocurrencies extensively by making it available as a payment option across 26 million merchants globally.