Consumers to make nearly 10 billion mobile payments in 2016
Near-field communication and mobile barcode scanning haven’t quite become de rigueur payment options, but strong early support for the nascent technologies will change that in the next five years, says market analysis company NPD In-Stat.
According to the research group, the 1.1 billion mobile transactions projected for this year will explode to 9.9 billion by 2016. That includes the barcode scanning currently used by Starbucks and Home Depot and near-field communication (NFC) transactions, notes Amy Cravens, senior analyst, In-Stat.
“The contactless or proximity mobile payments market is in its infancy and thus a variety of technologies are being explored and promoted,” says Cravens. “Based on the vast support for NFC and the endorsements made by significant players in 2011, it is apparent that this will be the dominant contactless payment solution going forward.”
Two such NFC backers are already heavily invested in making the technology mainstream. Visa ran an NFC trial in 2010, allowing New York and New Jersey commuters to pay fares with the swipe of a phone. A survey funded by MasterCard last year showed NFC was a-okay among 18-34-year-olds.
So, what’s the hold-up? Privacy and security concerns top the list. Though companies claim the wireless, contact-less technology is safe, plenty can go wrong. You’d be surprised what cyber crooks will devise when the dangled carrot is banking information or a credit card number.
Customers, however, are already flocking to NFC. In-Stat believes 41 percent of its predicted 9.9 billion mobile payment transactions will happen in Asia.
Japan has already jumped on the initiative, with over 60 million phones in the country boasting NFC technology. Japanese transit in particular has been redefined over the past two years by the quick and simple procedure — where boarding a train, bus or even a plane can be accomplished with the swipe of a smartphone.
This week, PayPal launched a limited mobile payment plan across the U.S. Barflies and restaurant goers with active accounts can ditch the “check, please” hand signal at 400 participating locations and just flash their smartphones.
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