The title is not a misprint. One trillion dollars.
That many dollar bills stacked atop one another would stand 68,000 miles tall. Lay them end to end, and they would stretch to the moon and back 200 times. If you managed to earn $1.3 million each day since Jesus was born until now, you’d still have less than a trillion dollars under your mattress today.
But consumers are set to spend $1 million on mobile payments in just five years time.
The staggering figure was computed by market research firm IDC Financial Insights in its report “Technology Selection: Worldwide Mobile Payments 2012-2017 Forecast” earlier this year. So, how exactly will consumers around the world spend $1 trillion in mobile payments by the time 2017 rolls around?
Breaking Down $1 Trillion
According to IDC, about two-thirds of that $1 trillion will come from what the firm calls “mobile commerce.” M-commerce is an e-commerce transaction that’s completed using a mobile phone or similar digital device. Examples of m-commerce include purchasing a physical product via smartphone from a company’s mobile website and downloading digital media (like mobile apps, video games, or music) to a mobile device for a fee.
The second most prominent way that mobile payments will be used: point-of-sale purchases. According to IDC, POS purchases will account for about 27 percent of the $1 trillion. POS encompasses goods and services acquired by swiping or scanning a smartphone at a checkout counter in a store and having the funds electronically transferred out of a bank or credit card account. Business transactions using mobile-payment card readers to swipe credit cards and receive funds also fall into this category.
The remaining 7 percent of mobile-payment revenue in 2017 — a paltry $70 billion — will consist of person-to-person money transfers. This involves private transactions in which one individual uses a digital device to access his or her account and electronically transfer funds to another person’s account. P2P transfers are already popular in places like Kenya, where the banking system is underdeveloped but the cellular phone infrastructure is mature.
That’s Not All
Albeit impressive, the trillion-dollar figure might not be the most astonishing revelation in the IDC report. Researchers estimate that it represents only 2.5 percent of all of the payments globally that could potentially be processed using mobile payments technology. To extrapolate, mobile payments could potentially increase to as much as $40 trillion in revenue by 2050 if worldwide infrastructure improves and demand continues to increase. Again, that’s 40 trillion dollars. If you laid that out in dollar bills, end-to-end …