US Mobile Payment Market to Reach $3 Trillion by 2020, Fintech Stocks Lead the Way

Fintech isn’t just about the blockchain and bitcoin revolution–the use of handheld devices to make mobile payments across a wide range of platforms is leading the fintech revolution in a big, big way.

A new Market Research Reports Search Engine report states the US mobile payments will grow from $550 billion in 2015 to reach $2.8 trillion by 2020, representing a compound annual growth rate (CAGR) of 39.1 percent over the course of that period.

China, however, already dominates the mobile payment industry in terms of widespread use, having reached a whooping $5.5 trillion already–which is 50 times current usage in the US. That said, the North American country has plenty of room to grow–which it no doubt will–thanks to a number of publicly traded fintech companies in the space making noise.

What’s contributing to the growth?

Market data from Statista indicates that beginning in 2018, transaction value will have an annual growth rate of 13.9 percent–which totals $2.15 trillion–between now and 2022. The largest segment of that can be attributed to digital payments, which Statista states will have total transaction value of $927 million in 2018.

More specifically, in focus growth can be attributed to:

• digital payments, including mobile point-of-sale payments and digital commerce;
• online crowdfunding–specifically equity and reward-based;
• robo-advisors and automated wealth management services; and
• marketplace lending (peer-to-peer platforms) for businesses as well as personal loans.

In terms of mobile point-of-sale payments, additional data from Statista shows that transaction values in that segment will total roughly $391 million in 2018, and growing at a CAGR of 35.7 percent until 2022 to reach $1.3 trillion by that time.

Companies leading the way in mobile payments

Some companies with mobile payment solutions include:

• Glance Technologies (CSE:GET)–the company’s flagship product Glance Pay offers mobile payments in restaurants. Through the app, its customers can pay their restaurant bills, access records, receipts, awards and even rate restaurants;
• Alphabet (NASDAQ:GOOGL)– while not a direct fintech company, Google’s parent company, Alphabet, is the creator of the Google Wallet, which is a peer-to-peer service payment that allows people to send and receive money from a mobile device;
• Apple (NASDAQ:AAPL)–Apple also isn’t a sole fintech company, although it is creator of Apple Pay, which is similar to Google Wallet in that it is a mobile payment and digital wallet that allows iPhone, Apple Watch, iPad and Mac users make digital payments;
• Samsung Electronics (OTC:SSNLF)– much like Alphabet and Google, Samsung isn’t a fintech company. It did, however, create Samsung Pay, which is similar to Google Wallet and Apple Pay. Samsung Pay is unique to Samsung users in that it lets users make payments with compatible phones or other Samsung-related devices.

Of course these aren’t the only companies at the forefront of mobile payments. A number of Canadian-related fintech companies are also leading the way in this innovative technology as more people begin adapting mobile payments in their every day lives.

All told, the growth of mobile payments is a global phenomenon, making fintech stocks an attractive investment opportunity for investors at every level.

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.