Mobile Payments Predicted To Explode, But It's Not About NFC Or E-Wallets

We hear a lot about the explosion in mobile payments, and new analysis by Gartner supports the idea that the tech is rapidly expanding—it'll rise 44% worldwide to over $235 billion worldwide this year. But Gartner's data may contain a surprise: The growth in use isn't to do with NFC wireless payments or even e-wallet enterprises. Mobile payments are more about money transfers and bill payments.

In fact money transfers will be 71% of this year's transaction value, and Gartner expects this share to remain high, even up to 69% in 2017. The analysis suggests that more people are using their phones to make money transfers partly because more banks and financial institutions are making the facility available (and more members of the public have smartphones). It's also noted that transfering cash in this manner can cost less than using a traditional banking route.

E-wallet payments, like Google's Wallet or ISIS's NFC system, are only predicted to be 2% of this year's transaction value. This sort of payment, widely expected to be the poster child of mobile pay, is only going to rise to 5% of all mobile transactions in 2017.

Apple is often suggested to be key to driving mobile payment growth, but the company has thus far stayed away from direct payment technology like NFC. Instead it's developed its own backchannel payment technology that uses iTunes customer payment data. Low security may be one reason behind Apple's hesitancy. There's a strong suspicion Apple will include fingerprint technology in upcoming phones, and this could be one way it solves the security issue of mobile pay.

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  • Lydia Lacey

    Interesting article.  It’s a pity
    that mobile wallet adoption has been so slow, but the majority of the current
    major companies don't particularly offer anything unique, plus there have
    been some major debate over the security issues of NFC based technologies.  I do believe that mobile wallet payments have great potential, and are the next thing in the world of technology that'll revolutionize how society currently carries out payment transactions.  However, it'll take more than what is currently on the mobile wallet market for this to happen.  Zync Wallet for example offers a lot more to consumers as a mobile wallet application, such as loyalty scheme integration, a voucher Pinboard within the app, and a general all round personalized service between the retailer and customer.  So it'll be interesting to see how the market takes off within the UK, particularly with what looks like a promising wallet application coming out.

  • andrewonedegree

    Spot on article. But, mobile wallets aren't all the same. The reason adoption is so slow at the moment is because they need the card schemes infrastructure, making them clumsy, vulnerable and not able to deliver any added value to the merchant....This is set to change though, with new technology comes new processes and ways of working. Look at companies like CloudZync and their wallet offering, these companies are seeing massive traction with merchants even before their wallets are made publicly available...

  • MCC Code

    Kit you are right on the spot that financials and banks are implementing mobile technologies into its services, basically a need of reduced personnel and self service type of products. However the phone technology (with or with out encryption), is the costly mistake of revolutionizing banking. Is simply a bad idea to have your phone as your bankcard especially if this is to be a standard, wallets on the other hand are somewhat user controlled (how much you really upload is up to you).
    In my opinion it will be a transition to some other electronic form of gadget a phone, tablet or pod created for this purpose, and maybe connected to you phone or with a SIM dedicated for these type of transactions.
    we will see baby steps first