Growth of banking and online shopping, particularly in developing markets, mean mobile payments are set to soar, Juniper Research predicts
The number of online payments made throughout the world is set to soar over the next three years as more of us use mobile phones or tablets to pay for goods, new research has predicted.
A study by Juniper Research found that more than 1.6 billion payments across the world were completed using a smartphone or tablet this year, thanks to a surge in consumers using the devices for banking, money transfer and online shopping services.
This figure is set to continue growing over the next few years as consumer use continues to rise, before topping the two billion transactions a year mark by 2017.
The report also predicted that contactless payments would be a key factor in this growth, with the launch of Apple Pay early next year providing NFC-enabled technologies with a major boost outside the already strong markets in Japan and South Korea.
However, many consumers still have concerns around the security of the transactions, particularly when including the financial details of the parties involved, meaning that companies need to ensure their security protocols remain effective.
The report also touched on the potential for large growth in developing markets, which often have higher levels of mobile penetration. Many customers in these areas are beginning to embrace mobile payments as they transition from purchasing mobile ringtones to rich content often via in-app purchases.
Operators and financial providers could also benefit from offering consumers in these markets financial inclusivity for the first time by providing them with mobile wallets. Many customers in developing markets are “unbanked”, having to links to typical savings and bank services, but mobile banking could enable services beyond payments such as savings and micro-insurance.
Overall, however, it may well be brands and retailers who can spur on the adoption of mobile payments via promotions and special offers.
“Brands and retailers should certainly seek to integrate their offerings with players such as Facebook and FourSquare,” said Dr Windsor Holden, the author of Juniper’s ‘Mobile Commerce Markets: Key Sector Strategies, Opportunities & Forecasts 2014-2019’.
“Integration offers reach, allied to the potential to target specific user demographics.” The report also recommended the integration of operator billing capabilities with websites to monetise digital content amongst a wider user base.
Payments using mobile and tablet devices certainly appear to be on the rise in many leading markets, with research by payments provide Worldpay earlier this year predicting that alternative payment methods such as e-wallets will be more popular online than credit and debit cards by 2017.
In the UK, more and more high street shops are signing up to the technology as they attempt to keep up with consumer demand. Last month, over 21 major UK retailers announced they would be partnering with Zapp to introduce in-store support for mobile payments from next year.
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