Mobile transactions could reach $1 trillion by 2015
Mar 15, 2013 Dave King
If the use of mobile devices by consumers for shopping and bill-paying by ACH cards continues to grow, transactions on smartphones and tablets could amount to $1 trillion worldwide by 2015, according to Heavy Reading Mobile Networks Insider.
The research service's report, No Idle Chatter: Payments Add Value to Mobile Ecosystem, details trends in the payments industry that are anticipated over the next two years as well as market drivers and challenges faced by businesses as consumers turn to on-the-go shopping more frequently.
"Mobile payments have gone from being a cool-to-talk-about concept to a disruptive technology in a relatively short timeframe," said Denise Culver, report author and a research analyst with Heavy Reading. "[Mobile network operators] and payment vendors should be looking at different ways to drive demand for mobile payments, which have the potential to create significant revenue throughout the entire mobile ecosystem."
Those customers who have become accustomed to paying bills and shopping online are moving over to mobile payments most rapidly, said Culver. As the sales of smartphones and tablets grow, that migration will increase.
Mobile network operators and retailers have followed suit by creating new technology and partnerships that develop payments by credit, debit and prepaid ACH cards through mobile devices even further.
Changing retail landscape
The changeover from shopping to "showrooming" at brick-and-mortar stores to check out the inventory, then comparison shop online by cross-checking items on phones or tablets, is changing the retail landscape, according to Culver. That shift is forcing retailers to change the ways they reach out to customers by integrating the use of mobile shopping and payments into their sales.
The Heavy Reading report's key findings indicate that retailers, rather than consumers, are the driving force behind the growing demand for mobile payments. As a result, the next two years will yield an increase in targeted services from merchants and vendors aimed at improving customer service.
A new subset of businesses will be affected by the mobile transactions growth. For instance, handset manufacturers and network providers will benefit from the increase in sales. But as competition grows, the report predicts there will be more consolidation of services. Partnerships will proliferate to include billing services, financial institutions and cell phone carriers.
By integrating analytics into the mobile technology, merchants will increasingly track what customers are buying, where they bought it and how much it cost. Real-time interaction will increase as retailers and consumers share information about transactions on social networking sites.