For those still unfamiliar with the concept of mobile payments (have you been living under a rock?!), here’s what the latest technology to make waves in the retail transactions industry is all about.
Mobile payments is part of the fledgling e-commerce industry where payments are eschewed from traditional forms such as cash or via credit card processing, instead they are made through the use of a compatible mobile device (like a smartphone or a tablet).
Revolutionary technologies such as Near Field Communication (NFC) are being used to help make this possible. However, while this concept is slowly gathering steam both in the US and everywhere else across the globe, some business owners are still hesitant to acquire the required technology to make these payments possible. Some of them will tell you that they aren’t entirely sure about the feasibility or long-term viability of mobile payments while others will say that facilitating this new method of payment isn’t as simple as accepting credit cards. Well, they aren’t totally wrong with the second argument, but I have points to substantiate the claim that the mobile payments industry is having a huge impact in the US and around the globe, and could very well be the next big thing on the block.
And the growth of major mobile payments players like PayPal and Apple Pay means you can’t halt the march of progress, and mobile payments are grabbing bigger market shares in the transactions business week-after-week.
What the numbers say
An article on CreditCardProcesssing.com makes the argument for mobile payments and poses some statistical data to back it up by saying, “In 2013, worldwide retail transactions accounted for $15 trillion and mobile payments were $235 billion with forecasts exceeding $720 billion in mobile payments by 2017.”
The aforementioned data suggests that in the four year period between the years 2013 and 2017, mobile payments are expected more than double!
That’s not all, as per a study released by Forrester, the US mobile payments market had already acquired a $52 billion figure by 2014. The forecast is that the US alone will account for $142 billion worth of mobile payments by the year 2019. For 2015, Forrester analyst Denee Carrington has picked out Apple Pay to be particularly successful, “Even if early consumer adoption is slow to ramp up, Apple’s approach for in-store and in-app payments will drive some competitors to become Apple Pay partners, yet motivate other competitors to prove they can outperform Apple Pay.”
The Business Insider, too, made some pretty strong statements regarding this particular market, as recently as June 19th 2015. They claim that:
“In our latest US in-store mobile payments forecast, we find that mobile payment volume will reach $37 billion this year. This is about half our previous estimate for 2015. The downward revision is primarily the result of later-than-expected launches of major mobile wallets from big tech players.”
“But by the end of the forecast period in 2019, we expect the volume to reach $808 billion, or about 99% of the old estimate. Our forecast is still one of the largest in the industry, and we think mobile payments will catch on faster than other research firms suggest: Mobile payment capability is either already offered or about to be implemented at merchants accounting for a huge chunk of US payment volume.”
“The number of people who make a mobile payment at least once a year will grow from nearly 8% of the US consumer population in 2014 to 65% by 2019. The growth in mobile payment users will largely be driven by mobile wallet initiatives from Apple, Samsung, and Google. When these are in place, 90% of the forthcoming smartphones in the US will come with mobile wallets preinstalled.”
While it seems that their forecasts for 2015 have dimmed slightly, the projection for the future of the industry is more robust than most others out there.
Clearly then, there is a huge amount of optimism about the mobile payments industry and how it is expected to really take off in the following 3-4 years. So if you’re a business owner, isn’t it better to get ahead of the game and in on the act now, and ride the wave of success that this new payment method is expected to bring? Or would you rather wait, watch, get left behind, and try to play catch up later?