A report compiled by Aite Group is predicting that mobile proximity payments will jump from $7.5 billion in 2015 to nearly half a trillion in in the next five years.
The report, ‘Mobile Proximity Payments: A Disruption in the Force’, also revealed that mobile commerce transactions in the US will be worth over the half-trillion mark at $536.5 billion by 2020. That’s nearly five times as much as its worth now ($112.5 billion).
“While mobile proximity payments will grow quickly as NFC distribution becomes universal and customers begin to use the platforms, mobile commerce will drive more transaction volume than mobile proximity payments in the next five years,” says Thad Peterson, Aite Group Retail Banking & Payments senior analyst and author of the report.
Aite says proximity payments will lag behind m-commerce payments because of roll-out factors. The US is still relatively behind the rest of the world in terms of payments technology. However, with the October liability shift getting closer, the country will undoubtedly catch-up the likes of European countries very quickly.
In some ways the US is actually ahead of the pack. After all, it has Apple Pay whilst the rest of the world doesn’t. That meant the likes of Samsung and Merchant Customer Exchange (MCX) have focused a significant amount of their time and money on preventing Apple payments domination in the US. MCX, a consortium of US retail companies, has its CurrentC, whilst Samsung is expected to launch Samsung Pay this year. It has reportedly spent $250m on LoopPay, a Massachusetts start-up, whose technology it will use in Samsung Pay.
Ultimately, Perterson concludes that mobile proximity payments uptake will depend on how good it is for the consumer.
“Customer adoption of mobile proximity will depend upon the quality of the user experience, which needs to be as good as or better than the card payment experience,” Peterson commented.
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