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In the past 12 months, 51% of consumers purchased a physical good using a mobile phone, the highest percentage in five years, potentially signaling a greater propensity for consumer adoption of mobile wallets, according to a new report from Javelin Strategy & Research.
That is up from 45% in 2013. In 2009, only 14% of consumers had made a mobile commerce purchase of a physical good, finds the report “Mobile Wallets Analysis and Strategy: How The Game Changes With Apple Pay.”
“Consumers are ready to use their mobile phones for purchasing,” says Mary Monahan, executive vice president and research director for mobile at Pleasanton, Calif.-based Javelin Strategy & Research. “They’re already trying to do it.”
As more consumers adopt mobile phones and use them for banking services, it is plausible that making a payment would be part of the behavior, too, Monahan tells Digital Transactions News.
They want to use their phones in stores, but are stymied by a point-of-sale infrastructure bereft of contactless payment readers. Estimates peg the number of U.S. merchants that accept credit and debit cards at between 5 million and 8 million, but only 220,000 merchant locations are said to be equipped for contactless payments.
That technology may get a boost from the advent of Apple Pay, Apple Inc.’s mobile payment and commerce scheme. “With Apple Pay, consumers have a way to pay that’s very easy,” Monahan says.
Javelin expects the volume of mobile payments and the percentage they comprise of the overall digital payment volume to increase over the next few years. In 2015, the volume is forecast to grow to $7.3 billion, reaching $53.1 billion in 2019. Mobile payments will go from an expected 0.18% of overall POS purchase volume to 1.24% by 2019.
Monahan also asked consumers about their favorite mobile wallets, where they store and manage their payment credentials.
At the top is PayPal Inc., which 42% of survey respondents said they were likely to use. The next most popular wallets were Google Wallet, 31%; Apple Pay, 28%; MasterCard Inc.’s MasterPass, 28%; and Visa Inc.’s Visa Checkout, 27%.
“PayPal will be interesting to watch,” Monahan says. EBay Inc. is spinning PayPal into a separate company in 2015.
What’s interesting about these five mobile wallet providers is how they approach trust, innovation, and privacy protection, she says. “Normally, those are factors akin to banks,” she says. “Over time, consumers are developing more trust in these institutions.”
In PayPal’s case, it has bought a number of companies, like Braintree, that extend its reach and add new ways to pay, while cementing deals, as with Discover Financial Services, to expand in-store acceptance locations, she says. “PayPal is a really popular brand among consumers.”
