By Rieva Lesonsky
While mobile payments and m-commerce have generated a lot of buzz in the media recently, both have been slow to take off and still comprise a very small percentage of payments and sales in the U.S. However, that may soon change, as two separate studies by Forrester reported in MediaPost project that mobile payments and m-commerce will surge in the U.S. in the next few years.
The first study projects mobile payments will increase from $18.2 billion this year to $90 billion in 2017—growth of nearly 50 percent. The study looked at three kinds of mobile payments. Mobile proximity, or in-store, payments are expected to grow fastest, increasing 137% to $41 billion by 2017, and going from 6% of mobile payments to 45%.
Much of the proximity payment growth is predicted to come next year, when Forrester says “early adopters” will begin using mobile payment solutions. This will force retail businesses to play catch-up and offer more mobile payment alternatives, as well as to incorporate Near Field Communication (NFC) technology into their point-of-sale systems.
The second study predicts that m-commerce will rise from $12 billion in 2013 to $31 billion in 2017, but its growth rate of 31 percent will be low compared to that of mobile payments. What’s holding m-commerce back? Currently, Forrester says, consumers are worried about security issues related to mobile transactions; m-commerce still isn’t well integrated with other ways to shop; and the checkout process needs to be simplified. (Both reports focused solely on the use of smartphones for payments and m-commerce, not on tablets.)
Currently, just 3 percent of ecommerce sales occur on smartphones, compared to some 57 percent that take place on tablets. Because of this wide discrepancy, Forrester’s report suggests that instead of worrying about how to encourage shopping on smartphones, retailers might be wise to focus on creating a better tablet shopping experience. After all, as tablet prices drop and tablets become even more widely adopted, it’s likely consumers will gravitate to them over smartphones when they want to browse or buy.
Image by Flickr user loupiote (Creative Commons)