20 Apr Mobile Purchases Up 300% Year-Over-Year
By the end of 2015, consumers made purchases on their mobile devices at a rate nearly 4 times greater than the previous year… an increase of 300% in mobile payments (or mPayments). And although this wonderful data gives merchants reason to rejoice, merchants still have much work in educating consumers in the security of mobile payments, because security is the number one reason for consumers not using their phones to do so.
Mobile Payment Users 2014 vs. 2015
The image below depicts in 2014 only 5% of consumers ever made mobile payments. In 2015 that percentage increased to 18%, with 8% of consumers making daily or weekly mPayments.
Usage Scenarios for Mobile Payments
Still standing in line to pay for parking or the bus? So 1990. How about paying by credit card at the gas station pump? Get with the times. Consumers want more! In Deloitte’s 2015 Global Mobile Consumer Survey, consumers ranked monotonous activities like paying for coffee, food, gas, parking, taxi, and public transportation highest as useful purposes for mobile payments. Prior to 2015, consumers primarily bought low-priced goods (below $20) with mobile payments. Mostly out of security concerns. However, in 2015 medium-priced purchases ($20 to $100) accounted for nearly 50% of all mobile payment transactions, according to eMarketer.
Payment Values Have Skyrocketed
Consumers in the U.S. are gradually beginning to respond to paying for goods and services with their phones. Currently, they generally make mPayments for items that require smaller transaction values because of consumer’s concerns about security or because they are not educated about security, which points to a lack of understanding of potential benefits for in-store payments. Mobile payments can be more secure than other forms of electronic payment; particularly with contactless near-field communication (NFC). However, some consumers are not aware whether their smartphones are built for mobile payments. According to Statista, U.S. mobile payments are forecasted to soar in 2016—from under $9 billion in 2015 to over $27 billion in 2016! Worldwide, the numbers are staggering…projected to be $620 billion this year.
Annual Payment Values are Incredible
Today, mobile payment solutions include several options which generally all work the same—enter your credit card information into an app before shopping and then launch the app at a store and have the cashier scan it, or wave the phone or tap it on the pad. Contactless near-field communication (NFC) has traditionally been the most widely used mobile payment option; projected to be one of the most successful future mobile payment methods. The cost is minimal to include NFC technology in mobile devices when they are manufactured. Still, other options include mobile web payments, which uses wireless application protocol (WAP); cloud-based mobile payments; mobile wallets; bar code; QR code; and short and multimedia messaging services (SMS and MMS); and others.
U.S. businesses are positioning themselves for the coming wave of U.S. mobile consumers, given worldwide increases of already massive volumes (and values) of mobile transactions. And companies have incentives to enter the mobile payment business, such as acquiring loyal members, offering special offers, paid advertisers on their app, among others. Mobile consumers are coming your way. Is your business’ online presence ready? Let us know in the Comments box below!