Judging by the second edition of WorldPay Ltd.'s Your Global Guide to Alternative Payments, mobile payments have a bright future that is only beginning to be realized. In the report, the U.K.-based processor predicted that mobile transactions will comprise a $117 billion global market by 2017, up from $18 billion in 2012.
That conclusion, which is based on data compiled by WorldPay and First Annapolis Consulting from surveys and interviews with experts in the e-commerce and mobile commerce industries, takes into account that mobile payments have taken time to catch on, as the mobile payment infrastructure needed to be built out to accommodate this growth.
"Whilst mobile has been a potential area of growth for some time, technology has only recently advanced enough to make mobile payments a feasible option," the report stated. In fact, the researchers noted that the global ecosystem for mobile payments has grown rapidly only in the past 12 months.
"Handset manufacturers seek to differentiate devices, and payment providers are introducing compatible services," the report stated. "Consumers are becoming more comfortable with making higher value purchases via mobile devices as the overall user experience improves." Mobile growth in perspective The growth in mobile payments mirrors the growth in smartphone ownership globally. The number of smartphones in circulation worldwide now exceeds 1.4 billion, the report said, with the average annual growth rate of smartphone ownership standing at 44 percent.
Mobile phone ownership is highest in Europe, where 88 percent of consumers have devices that are not necessarily "smart"; for smartphones specifically, ownership is highest in North America, where 54 percent of consumers have them. "Specialized mobile payment solutions will grow as technology advances and smartphone penetration rates rise," the report said.
However, it is wise to remember that the global payments market, including both traditional cards as well as alternative payments, is so big that growth in mobile payments is merely a drop in the bucket. Assuming the value of mobile transactions grows more than six-fold as anticipated between 2012 and 2017, mobile payments will represent only 3 percent of the entire payments market, the research revealed.
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