Mobile Payments Poised for 62% Growth in 2016, Says eMarketer

2016 could be an auspicious year for mobile payments growth. That’s if a forecast from eMarketer Inc. proves correct.

The New York-based research firm predicts that the number of consumers making mobile payments at the point of sale with smart phones will hit 37.5 million in 2016, a 61.6% increase from 23.2 million in 2015. That is the largest year-to-year growth rate through 2019, according to eMarketer’s forecast.

In three years, eMarketer says 69.8 million consumers will use mobile payments at the checkout in stores.

Along with more consumers using mobile payments, the value of the transactions made using the technology is expected to increase. EMarketer says that in 2016, consumers will spend $27.05 billion via mobile payments, a 210.6% from $8.71 billion this year. By 2019, the total will hit $210.45 billion.

As for what each consumer will spend via mobile payments, the firm suggests that the average annual spend per user will be $721.47 in 2016, a 92% increase from $375.82 in 2015. By 2019, eMarketer says that will increase to $3,017.02.

What accounts for the surge in mobile payments? EMarketer says it is the continuing nullification of the divide between digital and physical commerce, accelerated by the proliferation of mobile wallets as standard features on smart phones and the increasing number of merchants accepting mobile payments.

This summer Apple Inc.’s Tim Cook said Apple Pay acceptance locations will number 1.5 million by year’s end. If accurate, that’s double the 700,000 from earlier this year.

But having the payments infrastructure in place alone is an insufficient catalyst for mobile payments adoption, eMarketer says. “Connecting more of the retail commerce experience to mobile wallets, especially when it comes to offers, coupons, rewards and loyalty, will be critical to getting more people to pay with their phones,” the report says.

Mobile, overall, is viewed as an influencer in retail, with eMarketer estimating that only 1.6% of total U.S. retail sales happened on smart phones in 2015.

“As more connected devices come online as part of the Internet of things, and as overall connectivity between people and things increases, more people—and especially younger ones—will give up increasingly more of their personal data to marketers and publishers,” the company says. “They might not admit it, and they might not be happy about it, but at this point consumers are hooked on the convenience and value of the connected world.”