Digital Transactions Authoritative, insightful and timely information for payments professionals
Mobile-wallet transactions in the United States grew 333% from 2012 through 2015, albeit on a relatively small base, according to data released Friday by the Federal Reserve. Wallets generated 1.3 billion payments in 2015, the Fed data show, versus 300 million transactions three years earlier.
That robust rate of growth came during a period when three major-brand mobile-payment services were introduced by technology giants Apple Inc. (Apple Pay), Alphabet Inc. (Android Pay), and Samsung Electronics Co. Ltd. (Samsung Pay). Also, a slew of retailers has within the past two years launched proprietary wallets to take advantage of already-installed quick-response code technology and to help cement customer loyalty.
Nonetheless, mobile-wallet transactions remain a tiny fraction of the overall non-cash U.S. payments economy, as the Fed data show. Nearly all wallet transactions rely on the card and automated clearing house networks for processing. But consumer-based card and ACH transactions totaled 106.7 billion transactions overall in 2015, according to the Fed, which released a supplement to its latest triennial Payments Study. That study came out in December and analyzes data for 2015.
The Fed’s mobile-wallet data do not show a breakout of in-store, in-app, and online transactions.
Among other “alternative” payment methods, as classified by the Fed, online bill payments posted modest 3% growth over the years from 2012 to 2015, reaching 3.2 billion. These include payments through bank and biller sites. “Underlying details within the category show a decline in bill payments through banking websites and apps and an increase in payments made directly to billers,” says the Fed supplement.
Alternative person-to-person payments and money transfers, which the Fed combines into one group, doubled during the three-year period, but amounted to a relatively modest 400 million transactions. Mobile P2P payments are turning into a hot item in the industry, with major banks launching a new network, called Zelle, to compete with fast-growing non-bank services like PayPal Holdings Inc.’s Venmo.
Proprietary cards issued by merchants and processed through the ACH racked up 200 million transactions, the Fed supplement says, twice their volume in 2012. But walk-in bill payments, which involve in-person payments at stores, fell from 300 million transactions to 200 million after rising in the years leading up to 2012.
Finally in the “alternative” category, the Fed says online transactions authenticated by obtaining cardholder information grew 83% over the three years through 2015, from 1.8 billion to 3.3 billion payments. An example of such an authentication method is 3D Secure, a technology recently revamped by the major card networks. The new version, 3D Secure 2.0, is set for release in 2019.
