Tag: mobile payments future

According to a new study, mobile transactions will become more prominent in the future.

The results of a recent study, conducted by Javelin Strategy and Research, has found that mobile payments have increased in popularity and that over the course of the next five years, they are likely to be the payment method that grows the fastest compared to all other types of transactions.

More consumers will turn to mobile devices to make in-store purchases. 

While online shopping has gained a lot of attention, researchers who performed the Javelin study discovered that despite the popularity of e-commerce, 93% of the entire U.S. retail dollar volume is made up in brick and mortar retail stores. The study went on to report that it will not be long before mobile payments start to have a profound effect on the retail POS (point-of-sale) market.

Mobile payments are predicted to exceed $5 billion by 2018.

Results of the Javelin study revealed that the POS retail market is developing at an incredible speed. This is due mostly to the ever-increasing popularity of both the mobile payments and e-commerce markets. Consumers of today want a fast and convenient shopping experience and it is believed that digitized transaction methods will allow shoppers to achieve the superior in-store experience they not only crave, but expect.

Although mobile payments have yet to become one of the top payment options among retail shoppers, this is anticipated to change within the next five years. According to the study, by 2018, mobile payments in the U.S. will hit $5.4 billion. That being said, the researchers did also point out that they approximate retail POS purchases on the whole will be worth closer to the $4.2 trillion mark in 2018.

However, despite this much larger overall number, the amount estimated for mobile transactions appears to be nothing short of extraordinary. What’s more, the Javelin Strategy and Research study mentioned that, within five years, mobile payments will surpass all other types of payments in terms of having the biggest compound annual growth rate. Thus, in such a rapidly changing environment that is becoming more and more mobile-friendly, a big change in POS retail market trends is highly likely.

The marketplace is rocked by the shocking news that a major player has dropped out.

The CEO of VeriFone, Doug Bergeron, has stunned the direct-to-micromerchant mobile payments world with the announcement that it is stepping out of that marketplace following unprofitable results from its Sail service.

The point-of sale provider’s mcommerce news came as a surprise to the majority of the industry.

As VeriFone had dedicated a great deal of last year and much of this year on the promotion of the growth of mobile payments services, the decision that the company has now made to remove itself from that direct-to-micromerchant space has caused many heads to spin. The announcement was made during the most recent quarterly conference call.

The CEO released the mobile payments news that the company is stepping down.

During the call, Bergeron stated that Sail, its own mobile payments service, has been unprofitable. This program had been giving small businesses the ability to use smartphones and tablets to accept transactions through debit and credit cards. He said that “Customer acquisition costs, either through search engines or TV advertising, cannot and will never justify the razor thin margins produced by merchants with infrequent volumes and extremely high attrition.”

The NFC technology community has also been left blinking in surprise, as it had been looking toward that company to propel forward its adoption, particularly after the iPhone 5 was released without its capabilities.

Bergeron described the mobile payments program at VeriFone as a failure and is now causing many of the other players in the industry to take a second look at their own potential for profitability. This is particularly the case after the CEO questioned the ability of the environment to be profitable at all. The company has announced that all of its assets from that space will now be sold off.

He explained that he felt it is possible to see similar thoughts among the competition as their businesses models are shifted toward wallets services. It is his belief that the only mobile payments players who will be able to survive “this fundamentally challenging business model” will be those who are capable of offering micro merchants other services, as well.