Report: Starbucks driving most North American mobile wallet transactions

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North American consumers are on pace to spend $44 billion on in-store mobile wallet transactions in 2017, up from just $500 million in 2012, according to a new forecast issued by research firm Berg Insight.

While universal mobile wallet applications like Google (NASDAQ:GOOG) Wallet, U.S. carrier-led Isis and retailer-backed Merchant Customer Exchange are expected to drive the lion's share of mobile in-store purchase volume in 2017, at present the vast majority of mobile transactions are completed via coffeehouse chain Starbucks' popular Starbucks Card Mobile App, which connects iPhone, Android and BlackBerry devices to prepaid Starbucks Card accounts to enable barcode-based checkouts. Starbucks recently said it now counts roughly 4 million mobile payment transactions per week, doubling from 2 million at the end of 2012.

Berg Insight contends that mobile wallet services will not gain mainstream attraction until they offer a broader range of services alongside retail payment capabilities. "People do not have a problem with cash or payment cards today. Value-added services that enable new shopping experiences before, during and after payments will be what truly distinguish mobile wallets from the traditional payment instruments," said Berg Insight Analyst Lars Kurkinen. "Gaining an early lead in the market can be crucial, as in the long term only a limited number of mobile wallet services will survive in each market due to network effects."

Berg adds that as of the end of March 2013, there are now Near Field Communications-enabled mobile wallet services up and running in 13 countries worldwide, up from six at the end of 2011. These services remain limited to a small segment of consumers, however.

"With the exception of a few projects in Asia-Pacific, there are only three NFC mobile wallet services in the world that have an effective addressable market of more than 100,000 people. These three services are Google Wallet and Isis in the U.S. and Turkcell Wallet in Turkey," Kurkinen said. Berg nevertheless anticipates massive rollouts of NFC-enabled phones alongside NFC-ready point-of-sale terminals and trusted service manager solutions, adding that the global installed base of NFC-enabled handsets reached 170 million units in 2012--corresponding to approximately 3.3 percent of all handsets in use--and will grow at a compound annual rate of 65 percent through 2017 to reach 2.1 billion units at the end of the forecast period.

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