Tag: mobile payments growth

Mobile payments to see strong growth this year

Mobile payments are poised to see explosive growth in the U.S. this year. As more consumers show favor for shopping online using their mobile devices, their proclivity for mobile payments is beginning to show a dramatic increase. A new report from eMarketer, a leading market research firm, suggests that U.S. mobile payments will reach new heights this year and will continue to grow in the near future. Much of this growth is being driven by the focus businesses have been putting on mobile commerce.

Report highlights the future possibilities of the mobile commerce space

According to the report, U.S. mobile payments will surpass the $1 billion mark by the end of 2013. Mobile transactions will be coming from scanning codes with smartphones and tablets, using NFC-enabled devices, and by accessing e-commerce platforms through a device’s web browser. The report predicts that mobile payments will continue to show aggressive growth and account for more than $58 billion by the end of 2017.

Mobile payments face many challenges

While the report suggests a promising future for mobile commerce, it also notes that challenges that this sector has been faced with recently. Over the past year, the mobile commerce space has become inundated with a variety of platforms that offer convenient payment support to consumers. While there is no shortage of variety, none of these platforms have yet established a substantial lead over the others. The problem is that most of these platforms compete on a technological level, meaning that they are not universally accommodating to those interested in making mobile payments. The report suggests that the competition that these platforms create will keep growth in check until 2016.

NFC considered a wild card for many

The report also suggests that continued focus on NFC technology could be problematic for the future of mobile commerce. NFC has been subjected to harsh criticisms concerning security and efficiency. While most mobile commerce platforms are based on the technology, eMarketer notes that the technology itself is considered a “wild card” by those investing in mobile payments.

eMarketer has reduced its forecasts for the use and value of these transactions this year and onward.

Even as the mobile payments industry continues to insist that it is on the cusp of a massive explosion in use, eMarketer has slashed its growth estimates in half for the remainder of the year.

In October 2012, the firm had predicted that the market would reach the $2.12 billion mark this year.

However, in their latest report, which was only just released, it has reduced that figure to $1 billion, instead. Between 2011 and 2012, mobile payments had experienced a tripling in its transactions. However, eMarketers’ initial growth estimates have now been scaled back considerably as it witnesses an ever larger number of issues in the way of the adoption of these transactions.

Mobile payments struggles continue in the form of adoption problems, delays and a “congested landscape”.

One of the primary factors contributing to the slow adoption of mobile payments is the companies within that industry. There are a tremendous number of players, each of which have their own competing technologies. This lack of a standard or a universal format is causing both consumers and businesses to feel confused about the industry as a whole and is leading them to hesitate before even considering adopting its use.

eMarketer now feels that it will take until 2016 for mobile payments transactions to reach the $20 billion level. This is a full year longer than their previous forecast. At that rate, however, it could still mean that by the end of 2017, it may be able to reach $58 billion, which is certainly nothing to laugh at.

It should be noted that while adoption isn’t exploding as many predictions had thought, mobile payments remains and extremely hot space at the moment. The chance to redefine the way that people pay for the products and services that they purchase is a tremendous opportunity for startups, big tech companies, and large financial institutions alike. It is the first time that this kind of opportunity has opened up since debit cards joined credit cards as being highly popular forms of plastic transaction at a point of sale.