While remote payments are the major category of the mobile payment sphere, proximity payments are on the rise as well, and expected to sharply increase in the coming years.
US mobile payments is expected to reach $90B in 2017, a 48% compound annual growth rate from 2012’s $12.8B. While mobile payments are a growth area, there are a few specific factors that are driving this growth that companies must address to succeed in an increasingly mobile-influenced online economy. Recently released Forrester Research predicts that for most online retailers, mobile is expected to grow from 1.5 percent of online sales to 9 percent in 2017. In the US Mobile Payments Forecast 2012-2017, remote payments are still shown to account for 90 percent of the total mobile payment industry, but the area of proximity payments is expected to boom in the near future.
Mobile payments supports most of mobile commerce as well as business diversity
The bulk of mobile commerce still comes from payments (the aforementioned 90 percent), with online financial specialty startups like Square and PayPal creating a significant presence. Credit card companies also have positioned themselves ideally in order to channel these broad revenue streams from bank accounts to cell phones or tablets. This category has become established enough to support these major players as well as a diverse startup culture. Dwolla and Clover offer bank transaction or payment options for personal and commercial use.
Proximity will grow to a more significant part of the m-commerce economy
Proximity payments include near field communications and other tech that has yet to completely enter the mainstream. While proximity is the smallest performer of the categories that Forrester describes, it will reach $41 billion in 2017. Many of the contenders within proximity payments are also major presences in credit and financial services: services such as ExpressPay™ from American Express, Discover® Network ZipSM, MasterCard® PayPass™ and Visa payWave™. As more smartphones are released that support NFC and other proximity technology, we may see patterns diversify from these major credit companies into smaller startups and other interesting business ideas.