If there are any lingering doubts left among industry analysts, mobile payments’ momentum over the next few years is set to leave them spinning in their skepticism. A new report from Gartner Inc., a market research firm, forecasts that by 2018, half of consumers in mature markets will be turning to smartphones and smartwatches as their preferred payment method.
The impact of innovation
Traditional business models, like a small boat caught in a big storm, have stumbled in unsteady seas for the last few years as apps and mobile services undergo constant innovation. According to News Factor, Gartner analyst Amanda Sabia said that established ideas of how consumers use technology in their personal and professional lives have been particularly hard hit.
“Product managers must understand who their customers are for these new devices and services, and how the products are being used,” said Sabia. “Knowing your customer is imperative in order to capture a fair share of spending opportunities in this dynamic marketplace.”
By 2018, the shifting, ceaselessly-improving marketplace will even begin to put pressure on the major mobile payments providers of today. Apple Pay, Google Pay and Samsung Pay are all currently popular mobile wallets, while retailers like Starbucks and Walmart have also introduced their own private payments methods. The mobile wallets of Apple, Google and Samsung, however, may have trouble overcoming the hurdle of NFC’s limited adoption by some financial institutions and retail companies.
“Any mobile payment wallets that are tied to the device will have limited adoption and only if the device has a huge installed base,” said Annette Jump, Gartner’s research director. “Instead, cloud-based solutions will have a better chance to succeed as they can reach a wider audience and can support many use cases beyond face-to-face or in-store options.”
Greg Sterling, vice president of strategy and insight at the Local Search Association, told News Factor that he found Gartner’s forecast a bit over-eager in its numbers, even if they had the right idea.
“More consumers will be using their phones over time to pay for things in stores at a physical POS. Before that time, however, in-app payments will become much more widespread, with e-commerce and offline services being paid in app,” said Sterling. “The ease of use of something like Apple Pay and the proliferation of competing products and systems makes the Gartner forecast inevitable.”
Mobile payments increasingly popular
According to new research from the mobile platform Retale, 43 percent of U.S. shoppers used a mobile device to make an in-store purchase in 2015. That’s well up from the 36 percent reported last year. Of the mobile payments services described, PayPal proved the most popular.
Six in 10 shoppers said they would pay for a gift or some other kind of item using a mobile device this holiday season. In 2014, 56 percent said they would do so. The amount of shoppers who felt that retailers should provide some form of in-store mobile payment option also jumped, from 57 percent to 63 percent.
“The embrace of mobile pay has been slightly slower than many originally anticipated,” said Pat Dermody, Retale’s president. “But the growth that we’re seeing is undeniable, especially over the holidays when consumers seek out the best tools to streamline and simplify their shopping.”Back To Blog