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Despite slower growth than previously expected, proximity mobile payments will top $1 billion in the US this year, according to new figures from eMarketer, before expanding rapidly to reach an estimated $58 billion by 2017.
eMarketer defines mobile payments as transactions for goods or services made by scanning, tapping, swiping or checking in with a mobile phone at the point of sale. Often characterized as a proximity or contactless payment, mobile payments occur in real time in the real world, and are functionally different than mobile commerce—the purchase of digital or physical goods on a mobile device.
Driven by consumers buying items like daily coffee via closed-loop payment systems, as well as an increase in bigger-ticket purchases made via smartphones, mobile payment transactions more than tripled from 2011 to 2012 in the US, eMarketer estimates, reaching $539 million that year.
Still, the market is growing slower than previously expected, as evidenced by eMarketer’s scaled back estimates of user adoption and transaction value from initial projections in October 2012. Delays and adoption issues facing numerous mobile wallet initiatives, as well as a congested landscape of competing technologies, materially affect eMarketer’s outlook on mobile payment transaction values, which will not top $20 billion until 2016. The previous forecast predicted mobile payments would top $20 billion by 2015. Additionally, low-value purchases will still comprise the majority of transactions in 2013, causing a dip in the growth rate.
These estimates are based on the following key assumptions and variables:
Numerous forecasts tracked by eMarketer attempt to quantify the global mobile payments opportunity, although estimates vary widely based on the scope of how each research firm defines what constitutes a mobile payment, as well differing methodologies and assumptions of what will drive market growth. Players in the mobile payments value chain currently operate at a country-specific level due to local regulations and infrastructure considerations, meaning that regional perspectives can be more insightful than a global aggregate view.
Most researchers expect global mobile payments will reach transaction volume in the hundreds of billions of dollars by 2017. Despite these generally optimistic projections, discrepancies in scope, as well as downward revisions of past forecasts, underscore just how much the market is still in its early stages.
eMarketer's estimates are based on an analysis of the market presence of major mobile payment players; estimates from other research firms; and consumer smartphone, mobile payment adoption and retail spending trends.
In this case, eMarketer evaluated more than a hundred data points from over 30 research sources—analyzing the methodology, definitions and historical accuracy of each—before incorporating them into its own model.
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