Mobile payments have a huge amount of room for growth.
- That works out to about 4% of total global credit and debit card transaction volume in 2013.
But the U.S. has been lagging behind mobile payments leaders like Asia-Pacific and Africa. In 2013, U.S. mobile payments and commerce already combined for about 2% of total credit and debit card volume.
However, we believe U.S. mobile payments are poised for strong future growth. Mobile-based transactions in the U.S. have grown 118% per year on average for the last five years. It’s what will make the U.S. a leader in the mobile payments space going forward.
In the report, we put numbers to the trends and explain why mobile transaction volume is growing so explosively. A significant portion of card-powered e-commerce transactions take place on tablet or smartphone devices. Tablets and smartphones are also powering card-based transactions at physical stores through apps, scannable QR codes, and attachable card readers that transform devices into cash registers.
- What exactly is a mobile payment?: There’s a lot of confusion out there about what constitutes a “mobile payment,” and we reiterate our definition. A mobile payment occurs when a mobile, Internet-connected device is used to facilitate a transaction that might otherwise have taken place using a physical credit card, check, or cash, at a store or point-of-sale. Mobile transactions are a larger category that includes these payments, but also includes mobile commerce, or e-commerce channeled by an app or mobile website (e.g., Amazon’s iPhone app).
- Are consumers taking to these solutions?: Smartphone users are becoming aware of mobile wallets, payments apps, and QR-scanning apps and using them to facilitate offline and online purchases — most famously at Starbucks coffee stores. However, overall usage is still low. We look at the dynamics that will drive future adoption.
- Who’s winning in this space?: Payments start-ups are enjoying massive growth and helping to push forward innovation. A wave of acquisitions and mergers will clean this space up.
- How fast is innovation occurring?: It’s happening all the time. For example, Amazon’s “Pay With Amazon” product allows the 215 million active Amazon account-holders to use their payment info as they shop on their PCs and mobile devices on different commerce sites and apps.
- Is disruption still possible?: Yes. Take near-field communications, or NFC — uptake has failed to impress. Now, Apple’s Bluetooth-powered iBeacons technology may challenge NFC head-on.
The full report:
- Provides estimates on the proportion of U.S. and global credit and debit card-powered transactions that occur on mobile devices, both at point-of-sale and remotely.
- Explains why most mobile commerce and mobile payments apps and hardware still depend on credit card numbers to power transactions.
- Compares the various consumer-side mobile wallets, both in terms of awareness and adoption.
- Analyses the mobile wallet “disconnect,” the tendency of consumers to say they want added services on mobile wallets, despite the relatively low availability of such services.
- Examines PayPal’s acquisition of Braintree as an example of the deals that will shape the industry’s future.
- Looks at how legacy players like Visa are positioning themselves.
- Offers an update on the state of NFC and competing Bluetooth-powered solutions like Apple’s iBeacons.
- Quotes industry leaders on their vision of mobile’s role in the transactions space.
To access BI Intelligence’s full report on Mobile Payments, along with BI Intelligence’s in-depth coverage of the mobile, social, payments, video, and e-commerce industries, sign up for a free trial subscription here.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.