NFC-enabled mobile wallet solutions will become US consumers’ dominant mobile payments option for retail purchases while digital wallet applications will be most popular for mobile ecommerce payments, according to a new report from Parks Associates.
A new report from Parks Associates compares the long term potential of five different mobile payments technologies, and concludes that NFC is set to be the dominant mobile payments technology in the US.
Mobile Payment: Technologies and Business Models breaks down the mobile payment industry into distinctive market segments and analyses the market drivers, growth prospects, key business models and likely market leaders for each. Based on total transaction value, NFC-enabled mobile wallet solutions for retail purchases and digital wallet applications for mobile ecommerce will become consumers’ dominant payment choices, Parks concludes.
Other payment solutions like the barcode application developed by mFoundry for Starbucks or several carrier billing options will supplement consumers’ needs for specific types of goods and services.
Almost 50% of US smartphone owners now find the idea of an NFC-enabled mobile wallet application appealing, the researchers found, and 16% of smartphone owners already use PayPal or other types of e-wallet solution as their preferred method for mobile payments.
One in four millennials — those who grew up in the digital era — regularly use their mobile phones to research products or services prior to a purchase, the researchers add. These factors will create a commerce opportunity on smartphones of more than US$800bn in 2015 and boost business for merchants, retailers and financial institutions as well as mobile carriers, Parks concludes.
“While the segments of this market are diverse now, all major players are planning for a converged payments future where one digital wallet can be used for in-person retail payments and online payments across all product categories,” says research analyst Jennifer Kent. “Consumers will gravitate towards a single, trusted provider for most of their mobile commerce needs, so the development of a reliable wallet with diverse capabilities will be crucial.”
“The convenience of e-wallet solutions, specifically for eliminating the need to carry multiple or any credit cards, is driving the majority of consumer interest,” adds Harry Wang, Parks’ director of mobile research.