Those in the retail industry have likely been hearing for a while now that mobile payments would take off at some point within the next few years, but the problem is that many of those predictions started cropping up in 2011 or 2012. The fact is that this type of purchase still isn’t “there” yet, in a lot of ways, but new projections show that they will be sooner rather than later, and that could be a boon for retailers of all sizes.
In 2014, there were about 16.4 million people across the country that had smartphones capable of completing a mobile transaction, and that number jumped to a little more than 21 million in 2015, according to a report from the Los Angeles Times. That’s a significant step forward, but the one that’s expected for this year is even bigger: The number could approach 40 million nationwide, nearly doubling itself. And some estimates show that by 2019, the number should be closer to about 70 million.
Why is that important?
That kind of shift would constitute a far greater rate of acceleration than anything seen when these predictions first started coming out, the report said. Indeed, only 6.9 percent of smartphone users in 2014 had the ability to make a mobile payment, and by 2019 that number should be north of 27 percent.
Part of the reason for this surge is that more companies are actually manufacturing smartphones capable of making such purchases, the report said. It wasn’t until the iPhone 6 came out toward the end of 2014 that Apple had such an offering, though some Android phones had carried the capacity for mobile payments for a little while longer. Meanwhile, more companies are launching their own mobile wallet apps and mobile payment platforms – including a number of major U.S. retailers – to potentially further spur adoption going forward.
Is it working?
So far, a little more than 2 in every 5 consumers with an iPhone 6 or 6S say they’ve used Apple Pay at least once, but other research shows that less than 3 percent did so during Black Friday sales events, the report said. Other data shows that fewer than 1 in 4 consumers made at least one mobile transaction on any platform in 2015.
However, it’s expected that when consumers start using mobile payments more regularly, they will also start spending a lot more money, the report said. The average person making mobile transactions in 2014 only spent a little more than $224 on these purchases, but by 2019 it’s believed that the same person will probably be spending more than $3,000.
This should all provide good news for retailers who are thinking about getting into mobile payments but are worried about its viability. Consumers will slowly but surely take to the platforms, and will therefore be quite likely to make an investment by small businesses very much worth their while, because early adoption may help to solidify their standing among early-adopting consumers as well.Back To Blog