Report Sees Near Double Growth in Digital Payments Over Five Years

I just returned from a lovely, relaxing trip with a souvenir; a bad cold. I’ve been thinking through all the places I’ve been where I might have passed this crud along unwittingly – doorknobs and handshakes and, most conspicuously, public currency terminals. I know I’ve used dozens of card swipers at everything from gas stations to restaurants. Who ever really cleans those things?

Less exposure to germs may not be the primary reason contactless payment systems are taking off, but just one of the side benefits of a digital payment market poised to nearly double over the next five years. A new report from Juniper Research (News - Alert) – their first-ever “Digital Payment Strategies: Online, Mobile and Contactless” report – looks at trends, disruptive factors, the online-to-mobile switch, and more across eight global regions. Their findings show steady growth in digital payments, from $2.5 trillion this year to a projected $4.7 trillion in 2019.

Economic confidence will play a role as Western consumers continue earning and spending; in these established markets the biggest change will be from online to mobile payment portals. A shift is also occurring from purchases of physical mediums (CD, DVD) to online streaming and downloads, impacting the overall CD/DVD market. Emerging markets are expected to see large growth as customers flock to available digital retailers; China’s Alibaba alone accounted for one-fifth of all eRetail business globally in 2013.

RFID wristbands in use at England’s Glastonbury music festival provide just one example of the creative ways people are starting to use contactless payment solutions. Attendees can skip long lines at the ATM and use the wristbands to pay for drinks and merchandise. The supplier of the technology, Intelligent Venue Solutions, expects more than $10 million to be spent via contactless payment over the next three months of Britain’s festival season. An article in the IB Times notes that RFID solutions save money for organizers who don’t have to pay for “security and administration” of cash.

The full report from Juniper Research is available via their website by subscription.