Forecasts for mobile payments, including digital and physical goods, mobile money transfers, and NFC transactions are expected to nearly triple from 2012 to 2015, growing from $240 billion to $670 billion, according to Juniper Research.
Companies like Starbucks have already enjoyed success with their mobile payment application. Since the launch just 15 months ago, they have processed more than 42 million mobile payments, and with the announcement of their partnership with Square, they continue to expand in the space.
Mobile wallet applications from Google and ISIS continue to gain traction and both organizations remain committed to driving value for both merchants and customers through their mobile solutions. Google continues to add partners and features to their solution as the work to expand the acceptance points and deliver more value for the customer. ISIS, a mobile wallet solution backed by AT&T, Verizon Wireless and T-Mobile, recently inked partnership agreements with several major retailers including Macy’s and Footlocker and is launching in two markets, Salt Lake City and Austin, this summer.
As companies like Google, ISIS and others invest in mobile wallets, other large organizations are also converging on mobile payments. PayPal recently reorganized to further support mobile and inked agreements with major retailers including Home Depot, Barnes and Noble and Toys R Us. With more than 110 million active customer accounts, PayPal has built in users, which may expedite their app adoption.
Apple is rumored to announce its play in mobile payments with the forthcoming introduction of the iPhone 5, a follow-up to its Passbook announcement in June and the iWallet patent award. With over 400 million active accounts through iTunes, there’s no question that Apple will have a huge impact on the ecosystem if, or when, they officially enter.
And, then there’s Facebook, which recently transitioned from credits to real currency for it’s virtual goods, launched its application store and acquired Tagtile, a loyalty and direct marketing solution. Facebook is approaching one billion members worldwide, so only time will tell on their intention and the potential impact as it relates to mobile payments.
No one can deny that the payments space is changing. An industry that was once focused on credit card processing and the transaction is now focused on customer engagement, added value and convenience. Consumer loyalty, preference and trust will determine which mobile payment solutions succeed and consumers will demand choice.