Forecast: NFC, physical goods sales boost m-payments to $1.3 trillion by 2017
Mobile payments are on pace to grow nearly fourfold over the next five years, eclipsing $1.3 trillion in annual transaction value by 2017, according to a new forecast issued by Juniper Research.
Sales of physical goods completed as both remote purchases and Near Field Communications-enabled transactions will fuel the segment's growth, representing 54 percent of total mobile payments value by 2017. Juniper bases its expectations on NFC support infrastructure advances and increasing operator engagement with m-commerce services, citing examples like Isis--the nationwide mobile payments network spearheaded by Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T) and T-Mobile USA--and Google (NASDAQ:GOOG) Wallet, which is supported on several Android smartphones offered by Sprint Nextel (NYSE:S).
Despite the hype swirling around m-commerce, Juniper warns that physical goods sales conducted via mobile device will amount to just 4 percent of global retail transactions and 30 percent of digital sales at the end of the forecast period. Marketing is vital to elevating consumer awareness, report author Windsor Holden contends: "While we are now seeing significant deployments of contactless infrastructure, consumer awareness is extremely low. Thus, it is imperative for all members of the NFC value chain to engage with the public to heighten its profile as a simple, intuitive payment mechanism."
Juniper also encourages investment in secured NFC elements and trusted service manager infrastructure, noting that national regulatory requirements and limited interoperability between services are inhibiting mobile payments adoption in many international markets.
Last week, payments providers Google, PayPal, Isis, VeriFone and Intuit joined forces with Verizon Wireless, AT&T, Sprint and T-Mobile USA to forge the Mobile Payments Committee, an effort to create policies and business strategies to guide the U.S. m-commerce segment. Backed by the Electronic Transactions Association, an international trade organization with more than 500 members spanning all facets of the financial services industry, the Mobile Payments Committee aims to help participants more effectively tackle mobile payments challenges like technology standardization and interoperability, regulation and public policy, and merchant and consumer education.
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