Mobile Payments

Mobile payment and mobile wallet are concepts that have not taken off. The opportunity captured thus far has amounted to only a very small fractional percentage of the $3.25 trillion dollars of transactions that occur annually in the U.S. In 2018, analysts project that not even 1% of total point-of-sale (POS) transactions will occur using mobile payments.



Mobile payment and mobile wallet are concepts that have not taken off. The opportunity captured thus far has amounted to only a very small fractional percentage of the $3.25 trillion dollars of transactions that occur annually in the U.S. In 2018, analysts project that not even 1% of total point-of-sale (POS) transactions will occur using mobile payments. With recent security flaws detected in POS devices using a magnetic stipe on a credit card, it causes us to ask, what’s the problem?

Certainly it is technically feasible to move credit cards to the background of a transaction. Amazon, PayPal, Apple and many other companies keep credit card information in millions of online accounts. When you check out, you indicate the card you would like to use. PayPal has further proven that direct bank account integration an access, as well as a debit card, is possible.

Even though Apple has snubbed NFC, other technologies continues to evolve in the direction that makes mobile payments even more likely. Bluetooth Smart and beacons can confirm proximity of the buyer to the point of purchase. Eventually this technology will be widely deployed making payments as convenient, if not more, then waiting in line to swipe your credit card.

Relevant Market Forecasts

  • Forrester: $90 billion in the U.S. in 2017, an incredible 48 percent compounded annual growth rate over the $12.8 billion that was spent in 2012.

  • Juniper Research: $110 billion in mobile payment transactions across the North America and the Western European markets.

  • Forrester: Proximity payments will be $41 billion by 2017. Currently the smallest subcategory of mobile payments should become the fastest growing.

  • Merchant Warehouse: The US has been the number one country for credit card fraud in the last five years … a figure that is estimated to cost card issuers $2.4 billion annually.

Consumers, technology providers, or banks will not be willing to change – unless they see compelling value and a business case that makes it worth the investment. Mobile payment needs to be more valuable, easy to use, secure enough, and provide the shopper with seamlessly integrated incentives, such as loyalty points and discounts.

Markets are continuously changing. Consumer expectations adjust to new products and more choices. Innovation is necessary. N³ Innovation can help you evaluate market trends and stay relevant to future customers. Contact us today.

© 2018 N³ Innovation, LLC., All Rights Reserved.

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