Over a quarter of US smartphone users to make proximity mobile payments by 2018
eMarketer estimates that the number of US proximity mobile payment users—where a proximity mobile payment is a point-of-sale (POS) transaction made by using a mobile device as a payment method—will reach 22.6 million in 2015, up 41.7% year over year but representing just 12.7% of smartphone users. By 2018, more than one-quarter of smartphone users, or 57.0 million people, will make a POS transaction via mobile.
In terms of dollars, we expect the value of US proximity mobile payment transactions to come in at $8.95 billion this year, up from $3.50 billion in 2014. In 2018, this total will reach $118.01 billion. June 2014 estimates from BI Intelligence were far more bullish, putting US proximity mobile payment transaction values at $15.40 billion in 2015 and $189.00 billion in 2018. Meanwhile, Javelin Strategy & Research estimates were on the lower end, at $7.30 billion in 2015 and $34.80 billion in 2018.
According to February 2015 polling by Cowen and Company, mobile payments are grabbing a larger share of mobile spending each month—albeit slowly. Smartphone owners in the US said that POS mobile payments accounted for 16.2% of monthly spending in February 2015, vs. 15.7% in February 2014. This was above the worldwide average, which had risen from 12.9% to 13.5%. Only in the UK did the share get smaller.
In March 2015 estimates, BI Intelligence forecast that US in-store mobile payments’ share of total in-store retail payment volume would rise nearly tenfold between 2015 and 2019, from 1.5% to 14.8%—leaving plenty of room for growth.
However, research from PricewaterhouseCoopers found low demand for mobile payments in-store. Among US internet users, only 13% said using a mobile phone to pay for purchases would improve the shopping experience.
Mobile payment providers will need to ease consumer trust issues before such services truly become the norm. In the Cowen study, security ranked as the most important mobile payment service feature among smartphone owners worldwide, cited by 85%. This led ease of use and convenience as well as cost-related issues, among others.