Mobile payments deals slow, but consumer market poised for rapid growth
The number and total value of merger and acquisition (M&A) deals in the mobile payments sector dropped significantly last year from 2012, according to new research from Mooreland Partners. But the sector is poised for dramatic growth with consumers.
In an email to FierceMobileIT, the firm presented highlights from its new report, "The Future of Payments: Consumer Mobile Payment & Wallet Applications."
According to the research report, while "mobile payments have been talked about for over a decade … a lack of quality consumer technology has slowed adoption."
The result has been a marked drop off in mobile payments M&A activity--both in terms of the number of vendor mergers and the value of total merger deals.
From 2009 to 2013 there were 74 reported M&A deals in the mobile payments sector, Mooreland Partners says. In addition, there were 158 investments announced in the sector during the same time frame.
But 2013 marked a turning point in growth activity, with only 15 M&A deals--worth $1.03 billion--in mobile payments. That was a decline from 26 such deals in 2012. Further, the number of reported investments in the mobile payments sector in 2013 was 38--at a total value of $318 million. But again, that represented a decline, with 45 investments in 2012.
Still, the sector is poised for dramatic growth over the next few years in its top three segments: banking, retail and mobile payments.
Key findings from the report include:
Banking: Innovation is driving continued growth in mobile banking adoption
"In the US (and other developed markets) mobile banking has become 'table stakes' and consumers are gradually shifting behavior to use this technology." The result is that by 2016, more than 51 percent of U.S. mobile phone owners will use m-banking, Mooreland Partners says.
Retail: Massive opportunity as mobile point-of-sale (POS) systems go mainstream and OmniChannel disrupts the market
According to Mooreland, "increased emphasis around Omni-channel commerce solutions is driving new product development at major POS and eCommerce platform vendors."
Mobile payment: Innovations in services and contactless are accelerating growth
"Contactless mobile payment is expected to hit $10 billion by 2018, representing a 35 percent CAGR [compound annual growth rate] over the next six years." Driving the adoption among consumers will be loyalty, rewards, coupons and mobile ordering services, says Mooreland.
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