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July 21, 2015

Research: Mobile Money Transfer Market to Reach $13 Billion in 2015

According to recent research, the number of mobile payment transfers is expected to rise 150 percent globally in 2015. That growth will cause the market to reach more than $13 billion this year and appears to be having a positive effect on some social media sites.

The report from Juniper Research, “Mobile Money Transfer & Remittances: Domestic & International Markets 2015-2020,” shows that mobile payment companies such as Venmo, Square (which has partnered with Snapchat), WeChat, and Alipay have seen growth this year. Venmo, in particular, is showing nearly $1 billion in payment traffic each quarter.

This all begs the question: Where are the payments headed? It appears that, in developing markets, many people are topping-up their airtime for mobile phones. In addition, micro-lending and micro-insurance are also seeing a lot of activity in that market because it makes it easy for people who are not involved with a bank to protect parts of their livelihood.

Dr. Windsor Holden, a researcher at Juniper and author of the research paper, commented on this type of insurance and the protection it provides.

“The beauty of mobile-based microinsurance is that, for the first time, the unbanked can be afforded protection against natural disasters. Without it, a farmer suffering crop failure could lose his livelihood,” Holden said.

This could result in large-scale involvement for social media companies such as Facebook which already have a presence in those markets. Individuals are proving that they want to make digital payment transfers, and many people are already social media users. Facebook has made it possible for individuals to transfer money person-to-person (P2P) through its Messenger app. The company has said the feature is there to “[make] Messenger more useful.”

The Juniper report also found that sub-Saharan Africa contains more mobile wallet holders than people with traditional bank accounts. Furthermore, both WeChat and Alipay saw a spike in P2P money transfers in China during the period of the Chinese New Year. At that time, gifts as digital payments spurred the spike in activity.

Lastly, for service providers, this growth in the market could represent an increase of revenue from $2 billion in 2015 to $4 billion in 2018. Service providers and social media sites should take note of the potential here because it seems there is no chance of slowing in the few years to come.

Edited by Maurice Nagle

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