In-store mobile payments will increase by more than 1,000% worldwide this year with 5% of the world’s smartphones being used to make a payment in a store at least once a month, up from under 0.5% in mid-2014, according to the new edition of Deloitte’s annual Technology, Media & Telecommunications (TMT) Predictions report.
2015 will be the “first year in which the multiple prerequisites for mainstream adoption — satisfying financial institutions, merchants, consumers and device vendors — have been sufficiently addressed”, the authors conclude.
“Looking further ahead, Deloitte expects the number of NFC-enabled devices being used for making in-store payment should rise steadily over the medium term as consumers become more familiar with the process and more banks and merchants in more markets accept this form of transaction,” the report adds.
“We expect the volume of NFC smartphone transactions and the range of spend value to increase steadily over time. We expect the largest card issuers in the majority of the largest developed countries to have activated NFC smartphone payments by end 2015.
“By end 2015, we expect a minority of merchants to be supporting contactless smartphone payments. These will often be retailers that have already made the investment in replacing POS systems, and will often be stores with a high volume of relatively low-value transactions, such as fast food outlets.”
“The existence of hundreds of millions of contactless credit and debit cards should not constrain the usage of NFC-enabled smartphones as an additional means of payment,” Deloitte continues. “We would expect that when offered a choice, about 30 million individuals may opt to pay using their phone instead of a contactless card.
“Some NFC-based smartphone payment systems require pre-payment. We would expect these systems to remain popular and co-exist with approaches linked to debit and credit cards. Pre-paid would prevail among the under-banked.”
“Smartphones are already being used to check balances, transfer funds and transact online but they have not reached a mobile wallet status globally,” says Jolyon Barker, managing director of global TMT Industry at Deloitte Global. “We predict 2015 will be the first year that all mainstream mobile requirements will be addressed, making smartphone payment options easier, with user-friendly security in place.”