Mobile devices are edging closer to fulfilling their long-delayed promise as digital wallets.
Consumers are beginning to see the advantage of channeling offline payments through their mobile devices, rather than carrying around clunky coins and cash — even debit and credit cards. Consumers are primed to go wallet-free and begin paying for goods and services via their mobile devices, and as a result, mobile payments are set to explode.
In a new report from BI Intelligence, we explain the main reasons why mobile payments are poised for takeoff, provide proprietary estimates for the growth and size of the mobile payments market in the years to come, and analyse the specific trends that will help shape the growth in mobile payments, including user concerns around security, the demographic and geographic nature of the consumers who will drive the growth, merchant side adoption, and the mobile payments solutions that will lead the charge.
Here’s a brief overview of the current state of the mobile payments race:
- Overall, we’re still in the early stages of mobile payments adoption: As of year-end 2012, only 7.9 million U.S. consumers (less than 90 per cent of the total) had adopted a consumer-facing NFC-compatible system like “Google Wallet,” or apps that use QR codes or other methods to generate a payment. But, in-store mobile payments nearly quadrupled last year, card readers are building up real scale, and mobile payments as part of mobile commerce is exploding (PayPal alone processed $14 billion in mobile payments last year).
- Increase smartphone penetration in major global countries will help fuel a ton of growth: In Africa, mobile payments have grown as an alternative route of channeling economic activity, since banking infrastructure is poor or nonexistent. In Asia, mobile payments have prospered as a part of a wider smartphone-centric culture that integrates handsets into many facets of everyday economic life and consumer-facing infrastructure. As smartphone penetration increases across the board, so will global mobile payments.
- As will large-scale adoption of tablets and smartphones as registers on the merchant side: Many mobile payments solutions for merchants, which transform tablets and even smartphones into registers, still rely on consumer use of physical credit cards. Many mobile payments market estimates miss the fact that small businesses and enterprises are adopting mobile for point-of-sale tools. Merchant-side adoption fuels transaction value growth. The increased convenience, for merchants and consumers, of mobile payments services, which are nearing “convenience parity” with credit cards and cash.
- Just how big will mobile payments become? We forecast that, by 2017, the total value of global offline transactions facilitated by mobile devices will reach about $1.5 trillion, up from $120 billion in 2012. In the U.S., transaction value will rise to $244 billion in 2017, from $15 billion last year. The number of mobile payments users globally is set to explode as well. By 2017, the total consumer user-base will climb past the 500 million mark. That will be more than a five-fold increase from the less than 75 million consumers who used mobile payments at year-end 2012.
- Explains the main reasons why mobile payments are poised for takeoff,
- Provides proprietary estimates for the growth and size of the mobile payments market in the years to come
- analyses the specific trends that will help shape the growth in mobile payments, including user concerns around security, the demographic and geographic nature of the consumers who will drive the growth, merchant side adoption, and the mobile payments solutions that will lead the charge.
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