While it was something of a big deal to see more people turning to the Internet to carry out a large portion of shopping chores in the first place, the rush to mobile payments has proven to be much faster than the rush to online shopping by itself. A new study from Juniper Research (News - Alert) shows just how far this phenomenon is going, and it's set to catch on in a big way this year.
The Juniper Research study—entitled “Mobile Payment Strategies: Remote, Contactless and Money Transfer 2014-2018”—reaches one impressive conclusion by most any standard: by the end of 2014, mobile devices around the world will chalk up a combined total of around $507 billion U.S. That represents a projected rise of almost 40 percent over the same time last year, and the biggest source of this growth will come from people buying physical goods with a mobile device.
That's pretty impressive by itself, but the rest of the study brings in some staggering information in its own right, including the discovery that the average transaction size of a purchase made via a tablet is surpassing that of a purchase made on a desktop PC. Additionally, though spending via smartphones is up, the primary use of a smartphone is for gathering information rather than spending. The purchases, meanwhile, are delegated to a tablet. Another major driver of the mobile commerce concept is mobile ticketing systems, being added to mass transit systems throughout both Europe and North America alike, giving users a new way to pay for tickets on mass transit.
Despite the gains, impressive by most any standard, there are some challenges ahead for the new medium. Contactless mobile payment adoptions have proven to be what's described as “slow”, and few major launches using such a service have appeared. However, this may be poised to change as a new secure element (SE) technology starts emerging that can take better advantage of the features offered by near-field communications (NFC), and in turn, reduce the time-to-market rate required to get new solutions in this field out and available for users. Further improvements are set to arrive as more terminals with contactless capabilities are starting to ship to purchasers and make this option much more readily available.
Additionally, some taxation issues are starting to step in and muddy the waters a bit, particularly in emerging markets like Uganda, potentially pushing users away from domestic mobile money transfer systems and potentially into other forms of money transfer. If those issues catch on elsewhere, that $507 billion number may have to take some readjusting depending on how the laws fall. It's also interesting to note how the smartphone isn't being used as often as the tablet is when it comes to mobile payment. There might be a greater perception of security with the tablet than with the smartphone, or perhaps performance is regarded as superior with the tablet over the smartphone.
There's a lot going on in the mobile payments market. There has to be, really; with this kind of potential business at stake—that big point about $507 billion worldwide just this year alone has to be weighing on many businesses' collective minds—so figuring out how to get a slice of that rapidly increasing pie is likely job one for many businesses. Just how to get that slice is a matter only time will tell, but we're likely to see a lot more development on that front before it's all said and done...and bought and sold.
Edited by Alisen Downey
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