Some people are convinced that using smartphones to pay for goods and services is just a fad that will disappear over time. However, research suggests otherwise.
Here are some statistics that demonstrate how rapidly the mobile-payment industry is growing:
- According to a May 2012 survey, approximately one out of every three Americans make mobile payments. That’s more than twice the number reported in the 2011 Consumer Survey conducted by IDC Financial Insights. The 2012 report also showed that mobile payments are more likely to be used for physical goods than for online services or digital goods.
- Juniper Research estimates that gross receipts from mobile payments will reach $1.7 trillion in 2017. Sales of physical goods will drive this growth. About one of every 25 retail transactions worldwide in 2017 will be completed with a mobile device.
- A Nielsen survey conducted in the first quarter in 2012 indicates that 28 percent of people who own a smartphone in the U.S. have used it to pay for a purchase. In addition, 23 percent of them used a smartphone to comment about a purchase on social media, and 57 percent researched an item via smartphone before making a purchase.
- Consumers are starting to spend more money each time they make a mobile payment. Velti, a mobile marketing firm, reports that its mobile-payment platform saw a 9 percent jump in the average transaction amount between February and May 2012.
- Many people use mobile-payment technology for purposes other than making purchases. Out of some 4,000 Millennials (consumers ages 18 to 34) surveyed by the Boston Consulting Group, Service Management Group, and Barkley, 15 percent have used digital devices to make direct donations to groups or causes. That compares with only 5 percent of
adults 35 and older.
- Who do consumers trust most to handle their mobile payments? A 2011 Market Strategies survey of more than 2,000 people reveals that 73 percent of respondents put more faith in their banks than in the major credit card companies. The same poll found that more than three out of five people think that mobile-payment systems could jeopardize their personal or financial security.
- Finally, many e-commerce experts believe that cash may soon become a thing of the past. The Pew Research Center’s Internet & American Life Project polled more than 1,000 experts, 65 percent of whom said they believe that cash and credit cards will largely disappear by 2020. According to the poll, most people will rely upon “personal hardware and software for handling monetary transactions” instead.