As Forrester Research’s “U.S. Mobile Payments Forecast 2013-2017” shows, mobile payments are set to grow faster than ever in the next few years, reaching a $90 billion market in 2017. Key to this expected growth are new technologies such as proximity payment and other point-of-sale advancements.
Proximity payment and in-store payments refer to the ability of smartphones to automatically pay for goods by linking user financial information typically found in a digital wallet with store systems. Wireless innovations such as NFC (near field communication) have allowed for secure wireless communication between mobile devices and checkout counters for years. However, supermarkets and other retailers have been slow to adopt mobile payments. Questions about security have remained, and customers were simply not comfortable enough with their smartphones to use them to make payments. Stores also faced the need to revamp checkout counters and point-of-sale systems.
Forrester, however, points out that these are simply growing pains on the road to swift adoption. Proximity payment options, according to the research agency, are destined to grow from one of the smallest mobile payment categories to one of the most dynamic, worth $41 billion alone in 2017. In short, people have grown more accustomed to using their smartphones for a variety of tasks.
Forrester calls this the “mobile mind shift” and has reported that the average customer is in a place of transition, moving to greater mobile use and greater mobile expectations from the brands encountered on a daily basis. More convenient proximity payments and more reasons to change with the times will follow.
As Forrester explains, “Consumers adopt mobile payments when it’s clearly better than the next best alternative” — they are currently the easiest option compared to other purchasing options. As proximity payments and mobile remittance (P2P mobile exchanges of money) grow faster and become easier to practice, their use will also rise.
Other research companies agree with the trend. Javelin Strategy & Research, for example, has reported that the point-of-sale world has changed permanently with the addition of digital features, and the inclusion of smartphones and tablets will inevitably draw the market toward proximity payments. The company calls this trend an “industry-wide push for mobile technology” that will “help propel mobile payments to astonishing growth.”
Along with growth in mobile payments comes plenty of other mobile development as companies seek to integrate smartphones with other aspects of the shopping experience. Marketing through point-of-sale apps and proximity software, for example, could advertise similar products as customers pay for their goods or even offer the option to make an immediate purchase along with their current transaction.
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