There we are, at it again deliberating the ground reality of mobile payments and the future as we see it. For quite sometime now, proud owners of tablets and smartphones have been affirmative about making payments via their devices. Is this how we understand mobile payments? The research firm, Forrester has thrown some light on this most celebrated topic in the mobile space.
“A transaction in which the transfer of funds is initiated using a mobile phone – excluding the ‘voice’ function of the device” is how the research firm broadly defines mobile payments. Here is some classification too. The purchase of goods from an online retailer via mobile is the Mobile Remote Commerce. Then, there are peer-to-peer payments. It is the simple transaction between two people through a mobile device. And, finally proximity payments that are location based and allow payment with a smartphone at point-of-sale using technology like Near Field Communications (NFC). The topic of mobile payments, whenever discussed is more or less about proximity payments.
Forrester found that 90% of mobile payments were mCommerce related in the year 2012. The research body predicts the market for mobile payments to reach $90 billion by 2017 at a CAGR of 48%. No doubt, this is a huge number but not far from being. The next prediction probably forms the ground for proximity payments to take off. By 2017, mCommerce will see a drop from 90% of mobile payments to 50% with mobile payments comprising of 45% of the proximity payments.
While a couple of glitches have been discussed, Forrester states that one of the obstacles in the path of proximity payments gaining popularity is the lack of understanding between the consumer and the retailer. For the retailer to set up an expensive point-of-sale cashless transaction system, he needs a considerable consumer base which would go by the payment system. On the other hand, consumers wish to adapt this, only if a certain number of retailers have the required system in place.
Although, cash and card are the top transaction making methods, mobile payments surely will take over with the convenience they offer. For mobile proximity payments to be roaring, Forrester advises the payment vendors to convey the benefit to the consumer and ensure their prevalence amongst the retail folks. As we would see a lot of pilot testing in this space in 2013, we can expect things to materialize in the near future.
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