Mobile payments won’t go mainstream until 2016by
When Apple Pay was unveiled to the public in September, the general consensus was that it was now or never for mobile payments.
There are roughly 320m mobile payment users across the globe, according to Statista, however when you take into account that 44% of this figure is made up of PayPal users, and that PoS systems (required by merchants to make mobile payment transactions) only currently account for approximately 2% of total global transactional value, it becomes clear that the mobile payment market is still in a state of infancy.
eMarketer states the current rate of proliferation is a sign that mobile payment use among consumers won’t take off for at least two more years.
In its US-focused report, ‘US Mobile Payments 2014: Updated Forecast and Key Trends Driving Growth’ the market forecaster predicted that current trends towards spending (by the end of 2014, US consumers will spend $3.5 billion via mobile proximity payments) will increase in 2015 before seeing an exponential growth in 2016.
"The more things change in the US mobile payments space, the more they seem to stay the same - at least in the short term," said Bryan Yeager, the report’s author and eMarketer analyst.
"Despite a wider range of available technology and adoption from more merchants, consumers remain tepid about paying for goods and services with their phone at the point of sale."
Part of the reason for the current static marketplace is its fragmented nature, however eMarketer suggests major announcements from Apple in the space, along with PayPal’s split from eBay are further signs that major technology vendors see a change in circumstances on the horizon:
"Apple Pay will do a lot to bring consumer awareness to mobile payments, but it still has to work," Yeager added.
"If new Apple Pay customers get excited to try the product and there are hiccups the first time they use it, that's going to be a negative experience, and they might think twice about trying it again. Regardless of how good the technology is, adoption is also contingent on merchants using it properly and dedicating the resources to train their staff at the point of sale."
Mobile payment users -defined as mobile phone users who have made at least one proximity payment transaction in the past six months - will account for one in 10 US smartphone users (15.9 million) this year, according to the forecast, up 43.1% from 2013. User growth will remain strong in 2015, at 41.7%.
However, eMarketer expects the proximity payment user numbers to reach 36.2 million in 2016, up 60.5% from the previous year and more than double the number of users in 2014. By 2018, it predicts more than one in four smartphone users in the US will use mobile payments.
Chris is Editor of MyCustomer. He is a practiced editor, having worked as a copywriter for creative agency, Stranger Collective from 2009 to 2011 and subsequently as a journalist covering technology, marketing and customer service from 2011-2014 as editor of Business Cloud News. He joined MyCustomer in 2014.