The mobile payments landscape remains fragmented and continues to rapidly evolve, with multiple stakeholders working to get a piece of a multibillion-dollar opportunity. Capturing this opportunity hinges upon changing decades of ingrained consumer behavior; convenience, security and integrated promotions are key factors prompting consumers to use mobile payments.
Between 2011 and 2012, proximity payment transaction value in the US tripled, eMarketer estimates, driven by consumers purchasing items such as daily coffee via closed-loop payment systems, as well as an increase in bigger-ticket purchases made via smartphones. Getting consumers to use their smartphones at the point of sale to pay for habitual purchases will help push this cultural shift and uncover best practices for other key players seeking to drive adoption.
Payment processors, tech firms, mobile carriers, banks, credit card companies, retailers and startups are all working on a variety of strategies and technologies that aim to make mobile payments a part of everyday life. eMarketer believes that by 2015, many of these initiatives will gain traction, which will fuel consumer adoption of proximity payments across a broad spectrum of price categories, products and services.
With the mobile payments space in constant flux and various definitions floating around, it has been difficult for researchers to pinpoint the size of the mobile payments segment. By any measure, however, mobile payments is a multibillion-dollar opportunity that could easily expand to a multitrillion-dollar opportunity as smartphone penetration increases globally, market leadership clarifies and consumer adoption picks up steam.
eMarketer defines mobile payments as transactions for goods or services initiated with a mobile phone at the point of sale (POS). Often characterized as “proximity” or “contactless payments,” mobile payments occur in real time in the real world: for example, purchasing a cup of coffee at a local cafe. Mobile commerce is a broader term, encompassing the purchase of digital or physical goods on a mobile device.
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