Although the mobile wallet ecosystem is maturing, in-store mobile payments haven’t yet taken off. Consumer disinterest, coupled with delays in fully implementing the necessary infrastructure, are preventing mobile wallets from achieving mainstream adoption.
While neither US merchants nor consumers have yet to fully embrace mobile payments, mobile wallets offer benefits to all stakeholders: enhanced security features, faster checkout, and loyalty integration. Each of these is a plus for customers and merchants alike, and will eventually convince both parties to embrace the technology.
A new report estimate finds that US in-store mobile payment volume will reach $75 billion this year. Between 2015-2020, it expects volume to rise by a compound annual growth rate (CAGR) of 80% to bring mobile payments volume to $503 billion by 2020.
The report expect to see a significant uptick in the number of US consumers making mobile payments, forecasting the number of in-store mobile payment users to rise at a 40% five-year CAGR to reach 150 million by the end of 2020. This represents 56% of the consumer population during that year.
Mobile payments still face some high barriers, like consumers’ continued loyalty to traditional payment methods and fragmented acceptance among merchants. But as loyalty programs are integrated and more consumers rely on their mobile wallets for other features like in-app payments, adoption and usage will surge over the next few years.
In BI Intelligence’s 2016 Mobile Payments Report, it forecasts the growth of in-store mobile payments in the US, analyzes the performance of major mobile wallets like Apple Pay, Android Pay, and Samsung Pay, and address the barriers holding mobile payments back as well as the benefits that will propel adoption.
- Volume will reach $75 billion this year. Volume will pick up significantly by 2020, reaching $503 billion. This reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020.
- Consumer interest is the primary barrier to mobile payments adoption. Surveys indicate that the issue is less the mobile wallet itself and more that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits.
- Integrated loyalty programs and other add-on features will be key to mobile wallets taking off. Consumers are showing interest in wallets with integrated loyalty programs. Other potential add-ons, like in-app, in-browser, and P2P payments, will also start fueling adoption. This strategy has been proved successful in China with platforms like WeChat and Alipay.