Mobile Payments to Hit $500 Billion This Year
As smartphones and tablets have quickly rose to prominence in the tech industry, retailers have readjusted their business models to take advantage of the mobile shopping opportunities the devices provide to consumers. Now revenues from mobile payments are rising to levels unimaginable just half a decade ago.
Market research firm Juniper Research this week released a new report predicting that worldwide payments using mobile devices will hit $507 billion this year. That number represents an almost 40% increase in mobile payment revenue over 2013 levels.
The recent popularity of tablets in particular is raising mobile spending significantly. On Christmas Day 2013 nearly half of all online traffic came from tablets. This market penetration is now translating to revenue, as Juniper has seen recent average transaction prices on tablets exceed those on desktop PC in specific markets.
For years now the promise of ubiquitous contactless mobile payment solutions at physical retailers has been just out of reach. In the U.S. market much of the delay can be attributed to Apple’s reluctance to include NFC technology in its iPhone devices, but overall the problem is the slow speed of change in the payments industry itself.
Now that several hurdles have been cleared it appears that contactless mobile payments may finally become a routine payment solution in the coming years. Though progress in the segment has been slow, Juniper predicts that cloud-based solutions for contactless payments could drive faster adoption of the technology. The segment will also be helped by sales of point of sale (POS) devices, many of which now ship with built-in contactless payment capabilities.
“The prevalent business models for NFC have been unattractive to banks and left them dependent on multiple network operators, each of which may have its own approach to mobile wallet management,” said Windsor Holden, a research director at Juniper. “HCE (Host Card Emulation) solutions have the potential to revitalize a market which has struggled to gain traction.”