By 2020, mobile payments will be a much bigger part of the overall mobile commerce picture
Using a mobile phone to pay for a purchase at the physical point of sale is by no means common in the US. But as more people upgrade to smartphones with built-in mobile wallets and as merchants’ acceptance of mobile payment technology grows, the number and total value of such payments will continue to record large gains through 2020, as explored in a new eMarketer report, “US Mobile Payments Outlook: Strong Growth Forecast for Proximity, Peer-to-Peer Payments in 2017 and Beyond” (eMarketer PRO customers only).
eMarketer expects the total value of US proximity mobile payment transactions to total $27.67 billion in 2016, an increase of 183.3% over 2015. Next year, transaction value is predicted to more than double again to $62.49 billion. Steady double-digit growth is anticipated through the rest of the forecast period, with transaction value exceeding $314 billion in 2020.
Despite recent gains, the value and number of users of proximity mobile payments will lag behind other mobile commerce metrics tracked by eMarketer in 2016, including retail mcommerce sales, mobile travel sales and the number of mobile buyers and mobile travel bookers.
By 2020, however, mobile payments will be a much bigger part of the overall mobile commerce picture. The transaction total for proximity mobile payments—which, per eMarketer’s definition, exclude purchases made using tablets—will exceed both retail mcommerce sales made on smartphones and mobile travel sales.
What’s more, that milestone will be accomplished with fewer users relative to other categories. How is that possible? Traditional brick-and-mortar retail locations are primarily where consumers make proximity payments. Even with sustained double-digit growth in US retail ecommerce sales over the next several years, close to 90% of US retail sales will still occur in physical stores in 2020, eMarketer predicts. Shoppers swapping cash and card for the tap of a phone while in-store will help lift proximity mobile payment transactions.
A broader diversity of retail businesses accepting mobile payments over the next several years will also lead to an increase in consumers using smartphones to pay in-store for pricier products. eMarketer predicts that purchases of items costing between $20 and $100 will for the first time make up more than half (52.2%) of US proximity mobile payments in 2016, and represent more than two-thirds of such transactions by 2020.
In turn, the average annual spend per user using proximity mobile payments will continue to grow by leaps and bounds, from over $721 in 2016 to $1,230.94 in 2017 and exceeding $4,133 by 2020.