Forrester Research has complemented the National Retail Federation (NRF) Expo with a new report that predicts mobile payments will reach $90 billion in the United States by 2017.
While it does not receive as much press as CES or other more popular trade shows, the NRF Convention and Expo tends to highlight more commerce-focused, widespread trends. The 2013 convention surprised some analysts with its wholehearted embrace of phone-based payment innovation.
Forrester Research was not among those surprised. The firm released a forecast of U.S. mobile payments with a five-year view that focused on the future growth of the sector, which is expected to reach $90 billion in the next few years. The predicted acceleration is just around the corner, which is why the NRF emphasized the importance of developing and understanding mobile payment systems.
Currently, there are three primary mobile payment categories: proximity payments, peer-to-peer payments, and consumer-to-business payments. Mobile proximity payments are especially valuable to grocery stores and food retailers. This method employs a combination of near field communication tech and apps to allow customers to pay just by turning on their phones as they walk toward the exit. The proximity category is still developing, with initiatives by companies such as Starbucks making the headlines. It is expected to show the highest growth rates as major retailers finally take the leap. However, companies will have to accept the loss of point-of-sale revenue before this category realizes its potential.
The second category is mobile peer-to-peer (P2P) payments. Mobile P2P is also set to grow, but it has the natural constraints of all P2P trade and will not experience the gains of proximity payments. However, the P2P option encourages mobile trade on a global level, allowing individual buyers and sellers to find each other across national borders.
The third category is mCommerce, regular consumer-to-business payments. This category has experienced significant growth year-over-year and there is no sign of slowing down. Forrester predicts that mobile commerce will quadruple by 2017. Retail will be the fastest-growing category, accounting for approximately $25 billion in mobile commerce sales in 2017. While media products currently dominate the retail category, Forrester predicts that apparel and consumer electronics spending will also see rapid growth.
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