Mobile payments will become mainstream within the next two years, according to a survey of tech execs from KPMG, with 46% of those polled believing mobile payments will hit the mass market by 2013 and 83% claiming the technology will be mainstream by 2015, as the sector continues to heat up. The news comes as PayPal announces its first NFC ‘wave and pay’ product for Android devices and mobile payments continue to attract big backing amid growing market hype. Some 60% of execs interviewed say that they already have a mobile payments strategy in place and 80% believe the “ease” of remote transactions will be the strongest marketing angle to pull in wary consumers.
“We believe that exploding smartphone growth and myriad opportunities will grow mobile payments at a much faster rate than our respondents anticipate,” says KPMG global tech, comms and entertainment chair, Gary Matuszak. This latest prediction adds further weight to reports that mobile payments will power some USD50bn of payments by 2014 as operators, credit card companies and merchants start jockeying for a slice of the pie. Increased competition in the space will be good news for consumers at least, forcing companies to lower prices as they jostle for customer loyalty. Although PayPal has taken the lead, Google has already launched the Mobile Wallet and mobile payment startups such as Square continue to attract to big backing as rivals rush to bring their own products to market. Although rivalry is steep, there are arguably no losers in the mobile payments race with predictions that the global market will be worth USD670bn by 2015.
Fears that market hype surrounding mobile payments and NFC technology won’t necessarily translate to consumer uptake, are being stilled by reports that PayPal is already powering USD10m worth of mobile payments a day. This figure is only set to grow according to predictions that mobile payment users will increase 40% to hit 2.5bn by 2015 as increased smart phone ownership propels the technology into the mainstream consumer market. Emerging markets in China and Far Eastern markets are expected to see particularly strong growth and will account for 30% of the smart payment market by 2015.
Despite lofty market predictions, security continues to be the biggest hurdle for the industry to overcome, if the technology is to go mainstream in the next few years, with those polled suggesting that mass-adoption of the technology itself is a much less significant concern. Recent high profile security breaches at big online corporations, including the data theft of more than 70m Sony PlayStation users in April, continue to undermine consumer trust. Firms will need to prove they are taking adequate protective measures before users will be willing to share their credit card details, warns the report. “The business leaders understand that when it comes to consumers choosing a provider based on security can make the difference, and any damage to the business’ brand can prove costly,” says KPMG digital services head, Sanjaya Krishna.
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