With each passing year, it seems like more groundwork is laid for an explosion in mobile payments activity. Could 2016 be the year the dam finally breaks?
eMarketer certainly thinks so, as data from its most recent mobile payments forecast estimates a staggering 210-percent growth in transaction traffic by the end of 2016. Bryan Yeager, an analyst at eMarketer, explained that multiple elements will combine to make next year a particularly promising one for the future of mobile payments.
“Several factors will drive substantial mobile payments growth in the U.S.,” Yeager said. “Mobile wallets like Apple Pay, Android Pay and Samsung Pay will become a standard feature on new smartphones. Also, more merchants will adopt point-of-sale systems that can accept mobile payments, and incentives like promotions and loyalty programs will be integrated to attract new users.”
eMarketer’s research predicts these developments will push the total number of mobile payments users up to 37.5 million, compared to 23.2 million in 2015. Aside from gross traffic, overall and individual purchases should grow as well. In fact, eMarketer estimated that the average consumer using mobile payments in 2016 will spend about $721.47 over the course of the year for a grand market total of $27.05 billion by next year’s end.
What factor is most responsible for what looks to be mobile payments’ breakout year? All signs are pointing to younger consumers. Though eMarketer estimates that only 6.3 percent of consumers over 65 years of age will be using mobile payments by the end of 2016, eMarketer anticipates that 37 percent of 25- to 34-year-olds will have already embraced the technology.
“Younger consumers generally have fewer apprehensions when it comes to experimenting with and eventually adopting new technologies,” Yeager said. “That’s certainly true for mobile payments, where security concerns are more pronounced among older consumers.”
Experts have debated for years who will be responsible for pushing mobile payments past the tipping point, but is that point as close as eMarketer believes?
If you ask MPD CEO Karen Webster, there simply hasn’t been a strong use case for consumers to ditch their wallets for mobile phones. Instead, consumers care more about getting the best deal and less about how they are paying for those purchases.
“The U.S. is embarrassingly behind the rest of the world in mobile payments, despite being the largest card market in the world and despite playing around the mobile payments game for a long time. Our stubbornness with respect to getting on the stick with NFC technology has held back our progress and we are now in the position of playing catch up,” Webster noted in her speech at the Code/Mobile conference in California.
To check out what else is HOT in the world of payments, click here.