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The latest eMarketer data shows that the average proximity mobile payment transaction volume will increase almost 10-fold in the U.S. by 2016, while the number of proximity mobile payment users will increase six-fold.  This would largely be driven by consumers using mobile to pay for “medium-priced purchases such as groceries, gas, and fast-casual dining.”

 

As the article points out, this is based on the assumption that NFC/contactless payment adoption obstacles are overcome.  That is, more merchants will invest in contactless payment terminals to incorporate mobile payments into their checkout systems, and that more users will feel comfortable storing confidential information on their smartphones (which are increasingly becoming targets of theft) and using their devices as payment devices.  However, merchants may not invest in contactless payment terminals until there are more NFC users out there.  Meanwhile, mobile NFC usage is currently low in the U.S. partly due to low amounts of NFC networks and terminals and NFC-enabled smartphones in use.  Consumers with NFC-enabled devices may not use the functionality until there are more merchants out there supporting it.

 

Nevertheless, assuming adoption obstacles are overcome and the above assumptions ring true, increasing proximity mobile payment transaction volumes and users would mean that smartphones will become much more valuable—not necessarily more expensive, but are becoming an increasingly important source of revenue for marketers.  As more mobile devices are being used as payment devices, surely marketers will develop more marketing/loyalty programs around mobile payments, and contactless technology as well.  It is a good time to be in the mobile payments space, as mobile payment technology and services providers will see much revenue flow in.  Speaking of which, we may also see consolidation of companies in the mobile payments space. In addition, increasing mobile payment usage may negatively affect the banking industry as well, but I will save that conversation for another post.

 

Based on the charts above, below are some key highlights and takeaways I think are important for mobile marketers & advertisers to consider.

KEY HIGHLIGHTS:

  • Average proximity mobile payment transaction volume in the U.S. is currently at $0.64 and will increase to $62.24 in 2016.
  • Proximity mobile payment transaction volume will increase 234% next year.
  • Proximity mobile payment users will increase 6 xs to 48.1 million users in 2016.
  • Just 26% of smartphone users and 20% of mobile phone users in general will use proximity mobile payments to pay for goods and services.

 
KEY TAKEAWAYS:

  • Smartphones will become a much more important source of revenue for marketers.
  • Mobile marketers will innovate and develop marketing/loyalty programs around mobile payments.
  • Increasing usage of mobile payments may mean bad news for the banking industry as some consumers turn away from using credit and debit cards.
  • As mobile phones act as wallets for more consumers, they are becoming bigger targets for theft.

 
 

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