The transition from carrying big, clunky wallets to a payment-enabled mobile device is beginning to revolutionize how consumers shop.
Of course, there is no set standard for mobile payments technology quite yet.
Isis and Google are both working on their versions of the mobile wallet using Near Field Communications (NFC) technology, and PayPal is working on a cloud-based mobile payment initiative. Companies like Square and Intuit also help small businesses process payments via their mobile phones, and there are QR code-based payments in the marketplace, like LevelUp, where individuals are assigned their own unique QR code to pay with. In addition, companies like card.io and Jumio allow consumers to make payments by scanning the credit card with your smartphone’s camera.
With that being said, the future looks bright for companies in the mobile payment industry. Here’s why:
- Mobile payments in 2011 topped $558 million in investment, up from $276 million in 2010, according to research firm Rutberg & Company.
- eMarketer projects that 37.5 million U.S. consumers ages 14 and up will make at least one purchase on their mobile phones in 2012.
- eBay predicts it will do $8 billion in mobile gross merchandise volume and $7 billion in mobile total payment volume in 2012.
- PayPal exceeded expectations for 2011, reaching $4 billion in mobile payment volume, and with more than 17 million customers regularly making a purchase through their mobile phone.
- PayPal is also expanding its new mobile wallet trial services to more than 2,000 Home Depot stores across the U.S., allowing consumers to pay for items at checkout via mobile device or through PayPal and exposing thousands of people to mobile payment technology.
The merge of mobile and money has made huge progress in the past year, which means retailers who embrace it will have a leg up on their competitors.
How will mobile commerce benefit the retailers bottom line?
Mobile payments add value and convenience to the consumer. They will also facilitate the implementation of deals and offers through text messaging or apps, which will ultimately drive customer loyalty.
The problem, however, is that consumers still trust their credit card companies and banks to drive mobile payments.
However, KPMG’s fifth annual Consumers and Convergence survey has found that 23% of US consumers are now “very willing” to use their mobile phones as a wallet, and a study by Javelin Strategy & Research and PaymentOne found that 4 out of 5 consumers would spend more online if offered an easier and more secure way to pay.
Without a doubt, mobile is a very personalized channel that businesses can use to directly interact with their customers, and mobile payments help enhance the in-store experience for consumers.
As consumer attitudes about mobile payments start shifting, we will be seeing more and more people ditching their wallets.