Mobile commerce continues to change the way people pay for products
With the advent of mobile commerce, the concept of using a smartphone or tablet as a point-of-sales terminal gained more traction. Consumers have been growing more comfortable with the idea of using their mobile devices to purchase products over the past three years. As a result, more of these mobile devices have been showing up in several markets as point-of-sale systems. For merchants that had been traditionally unable to facilitate credit and debit card transactions, this may provide them with the ability to reach a wider demographic of consumers.
Study details growth of mobile point-of-sale technologies
A new study from Javelin Strategy and Research, a market research and analysis firm, highlights the potential impact of new merchants entering into the mobile commerce field. According to the study, mobile point-of-sale transactions are expected to account for $1.1 trillion in new mobile payments. The study also suggests that the number of merchants able to accept mobile payments will swell by 20 million.
Mobile commerce becoming a formidable force in the world
Mobile commerce has become a major force in the world. The number of consumers with smartphones and tablets has made it possible for this new form of commerce to emerge. Several industries have begun responding the growing popularity of mobile commerce and new point-of-sale technologies are making it possible for consumers to have even more access to mobile commerce services. The more these mobile point-of-sale platforms grow, however, the larger threat they present to the traditional point-of-sale market.
Traditional technology may be losing ground
Traditional payment terminals, such as cash registers, may soon be considered obsolete. These point-of-sale platforms exist to manage physical currencies rather than virtual currencies. Mobile commerce allows for accurate transactions and removes the need for physical currency, which may be enough to push older technologies away from the industries that have relied on them for several years.
The latest research indicates that it makes up only 0.01 percent of the total in the United States.
According to a report that was just issued by Javelin Strategy & Research, mobile payments using contactless technology at the point of sale (POS) made up only a tiny sliver of the total volume in the United States in 2012.
The report indicated that this technology was used for only 0.01 percent of the total POS volume in the U.S.
The research data showed that the total amount spent over contactless mobile payments was approximately $500 million. At the same time, though, the report did not see a grim future for this form of smartphone based transaction. In fact, based on their predictions, things are looking bright in that area.
The forecast made by the report is that there will be an increase in mobile payments at a CAGR of 61 percent.
According to Javelin’s predictions, the compound annual growth rate that will be seen for mobile payments using contactless technology will be 61 percent this year. This will mean that the method will experience growth at a rate that is higher than any other method. In fact, it is predicting that this trend will continue over the next five years, and that in 2018, the total volume will have reached 5.4 billion. This will mean that it will make up 0.13 percent of the total POS volume in the United States in that year.
A Javelin industry analyst, Aleia Van Dyke explained this trend by saying that the point of sale market in retail is experiencing a very rapid evolution, as the popularity of smartphones and mobile payments takes off. There is a much greater expectation from consumers today, as they feel that the retail businesses where they shop should be providing an enhanced shopping experience while inside the walls of the store through the use of smartphones.
The rapid implementation of mobile payments and other transaction options such as prepaid and gift cards have helped with the adoption of other technology based options, among consumers, according to Van Dyke. As a whole, retail POS purchases last year brought in $3.98 trillion. The prediction for five years down the road is $4.2 trillion.
