A recent report from Juniper Research (News - Alert) – “Mobile Commerce Markets: Key Sector Strategies, Opportunities & Forecasts 2014-2019” – found that mobile transactions are expected to soar in the next few years, reaching a level of 2 billion transactions by the end of 2017. For comparison’s sake, the research firm estimates about 1.6 billion transactions by the end of this year.
The rise has largely been attested to the increase in e-commerce purchases carried out from mobile devices as well as mobile banking services, such as money transfers. Juniper Research expects that Apple Pay, the company’s entry into the mobile payment and digital wallet market that was announced along with the iPhone (News - Alert) 6 and 6 Plus in September, will be responsible for a large portion of growth in contactless payments due to its robust security features and widespread customer base.
Contactless payments have yet to really take off anywhere other than in Japan and South Korea, but Apple (News - Alert) Pay is expected to be a source of momentum in the U.S. It’s already seeing success with over a million credit cards already activated, according to Apple CEO Timothy D. Cook.
Juniper Research emphasized that social media can and should play a large part in assimilating the technology into the common culture. Windsor Holden, the report’s author, wrote, “Brands and retailers should certainly seek to integrate their offerings with players such as Facebook (News - Alert) and FourSquare. Integration offers reach, allied to the potential to target specific user demographics.”
The benefit of this approach has already been discovered by Facebook, which is actively working on integrating payments into its Messenger app. However, CEO Mark Zuckerburg on Facebook's third-quarter earnings call noted that this functionality is still a long ways away, explaining how payments are “an important part of the online business ecosystem, but we've traditionally thought about this as something that we're going to partner with other companies on to enable great solutions, rather than trying to compete and do it as a business ourselves.”
The research firm also noted that the provision of mobile wallets is an opportunity for mobile to offer first-time financial inclusivity to consumers in emerging markets. Thus there is potential for services other than mobile payments, such as savings and micro-insurance. However, concerns about security remain the number one inhibitor on consumer adoption.
Although there are still a few details of mobile payments technology that still need to be ironed out, the main reason it has not advanced further and permeated more aspects of life is simply a lack of adoption. As demonstrated by the report from Juniper Research and with the newfound availability of impressive solutions like Apple Pay, this issue will soon be a thing of the past.
Edited by Maurice Nagle
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