From the desk of Gina Gilbert
It seems these days that there is a lot of buzz around Mobile payments, but is this industry really gaining any traction? According to Forrester Research, the answer is yes and it’s just getting started.
Forrester Research views Mobile Payments in three categories: 1) in-store mobile payments (proximity payments), 2) mobile commerce (mCommerce) and 3) mobile peer-to-peer (P2P) and remittances. $12.8B was spent via Mobile payments in 2012. Forrester projects that this number will be approximately $90B in 2017, a 48% compound annual growth rate (CAGR) compared to 2012. Of the total mobile payments, mCommerce currently represents about 90% while in-store mobile represents 4%. By the end of 2017, Forrester predicts that in-store mobile payments will experience the most growth jumping from 4% to 45% while mCommerce will drop from 90% to 50% of this category1.
So what are some of the emerging trends for mobile payments and what can we expect to see down the road? Well according to The Mobilists2, we can expect to see several trends; some that have already begun that will continue to be embraced by consumers, and others that are on the brink of emerging.
We’ve already begun to see the impact that mobile apps have in our everyday life. We’ve reached the point when “there’s an app for that”. Mobile subscribers can get directions to your favorite restaurant using GPS technology, monitor the security of their home, care for their pet, and increase the effectiveness of emergency responders. Mobile apps have raised the bar on efficiency, convenience and timeliness of everyday tasks giving users peace of mind.
Another area that is just beginning to surface is mobile technology integration in the automotive industry. Mercedes and Chevy are now offering Siri to some of their in-car systems and the Ford Focus has SYNC with MyFord Touch. Ford’s solution will require a smartphone to be present in the vehicle using the existing data plan, whereas, GM’s offering will be integrated into the car and will not require a smartphone to function.
Gathering data is one thing, but acting on it is another. Mobile allows us to not only gather more data but beginning this year, tremendous strides will be made in converting the data into actions. For example, using geodata from mobile apps and text analytics helps emergency services deliver a faster and more accurate means to aid people in need of help. Merchants will also be able to understand who their customers are, how often they visit their locations, and how much they are spending, thus empowering them to deliver targeted and compelling offers and discounts to influence customer spending and increase sales. This two-way communication is a win-win: the merchants know their customers and communicate directly to the palm of their hands and customers receive real-time value via their mobile device.
Mobile shopping is already a growing trend and according to a report by Deloitte entitled “The Dawn of Mobile Influence”, nearly half of all U.S. consumers already have a smartphone and that number is quickly growing. Furthermore, the report indicated:
- Roughly 58% of consumers who own a smartphone have used it for store-related shopping
- Among smartphone shoppers, the percentage who use their phone for shopping varies by store category, from 49% in electronics and appliance stores to 19% in convenience stores and gas stations
- Once consumers start using their smartphones for shopping they tend to use them a lot – typically for 50-60% of their store shopping trips, depending on the store category.
So it’s safe to say that the road ahead looks very exciting for mobile payments. Consumers and merchants can look forward to new applications of this technology that help to make relations between companies and their customers relevant and meaningful.
1http://blogs.forrester.com/US Mobile Payments Forecast 2013-2017: Mobile Payments to Reach $90B by 2017, Denee Carrington, Wed, 01/16/2013