It has been a great year for mobile payments technology. New data shows that U.S. mobile payments were nearly four times greater in 2015 than they were last year, which is both the result of and the motivating factor behind giant companies racing each other to win over in-store mobile shoppers.
Mobile payments up all over the world
According to Deloitte’s Global Mobile Consumer Survey, countries like the UK, France, India and Russia all reported increased in-store mobile payments use, or at the very least, a willingness to do so. In the United States, mobile payments use jumped from 5 percent in 2014 to 18 percent in 2015. That means that about 1 in every 5 consumers has used their smartphone to make a payment.
NFC World reported that 5 percent of U.S. shoppers use their mobile devices for in-store payments weekly, while 3 percent do so daily. An additional 5 percent make mobile payments less than once a week and 5 percent said that they had only ever done it a couple of times.
Mobile payments users utilized the technology for public parking more often than anything else, with 19 percent reporting they had done so, but gas station purchases and fast food and coffee shops were right behind with 18 percent and 17 percent, respectively.
Americans between the ages of 25 and 34 were the consumers most responsible for driving mobile payments’ leap in popularity.
Walmart follows Starbucks’ lead
Another contender entered the mobile payments’ arms race this week, as Walmart joined major companies like Apple, PayPal and Starbucks by launching its own mobile payments system. With an update to its existing app, Walmart now allows shoppers to ditch credit cards in favor of paying with their smartphones.
“We are creating a seamless shopping experience that includes payment,” president and CEO of Walmart’s global eCommerce division Neil Ashe said on a Wednesday conference call, according to the Associated Press. “It’s fast, it’s simple, and it’s a secure way for customers to use their smartphone.”
Fortune reported that Walmart is looking ahead to the next few years, when the mobile payments market is expected to grow exponentially – up to $142 billion worth of transactions by 2019, Forrester Research found – by staking its claim early.
Sucharita Mulpuru, an analyst with Forrester, told Fortune that Walmart’s genius was in following Starbucks’ ideal lead. The coffee company’s mobile app, originally designed so that customers could pay with gift cards, evolved over time to allow them to pay directly with their smartphones. In just two years, the amount of Starbucks customers utilizing mobile payments has more than doubled to 20 percent of all in-store transactions.
Walmart took some time to embrace mobile payments – it publicly rejected Apple’s technology in 2014, opting instead for the struggling Merchant Customer Exchange – but now that they have, the 22 million users of the company’s app will be able to enjoy Walmart Pay at 4,500 locations nationwide next year.
In its competition with Amazon, Walmart’s mobile payments app gives it a new edge. As it continues to test new services, perhaps like the one Starbucks provides in allowing customers to pick up orders in-store after paying for them ahead of time on their smartphone, Walmart will take advantage of the vast opportunities mobile payments offer.Back To Blog