U.S. Proximity Mobile Payment Value To Hit $62 Billion in 2017
Peer-to-peer payments have helped bolster the industry overall, showing new consumers the advantages of operating in a world beyond cash and cards.
The number of proximity mobile payment users in the U.S. will climb 32.4 percent in 2017 to 50.8 million, and those consumers will go on to spend an estimated $62.49 billion through smartphone-enabled commerce, according to an eMarketer report.
This represents significant growth in the industry, and physical businesses would be wise to enable and encourage it through their POS systems. It also begs the question: Does 2017 thus mark the tipping point for mobile payment?
Now, we’ve been hearing about the “year of mobile payment” since 2014. But what previous projections often missed in the search to find the tipping point toward smartphone — or smart device — enabled commerce is this: the rise of peer-to-peer payments.
The Value Of Venmo
At the end of 2016, the mainstreaming of peer-to-peer options like Venmo has normalized making payments absent cash or cards simply through convenience; even customers who didn’t immediately see the utility in tapping their phone at a POS system (rather than swiping a card) came around to the idea that paying a friend with the tap of a button was easier than trying to extract exact change from an ATM.
As such, while in-store mobile payment already existed, peer-to-peer payments have both grown on their own and appeared to push the burgeoning industry further by showing consumers the strategic advantages of operating without cash or cards. Mobile peer-to-peer payments will reach an expected $59.42 billion by the end of 2016.
This heralds a growing acceptance of mobile payment options overall, but eMarketer analysts are quick to point out that they must provide value — or an improved experience — over traditional commerce, or consumers won’t truly see the point in making a switch. Experimenting with tying together mobile payment and loyalty points is one way that stores might see a boon in sales — and we expect to see a variety of innovation in this space in 2017.
“Consumers in the US are growing more comfortable using their phone to make payments, whether in apps, in stores or to each other via messaging platforms and virtual personal assistants,” the report concludes. “But mass market adoption isn’t assured, especially if the value such payments provide fails to extend beyond just replacing a card swipe or dip with a tap of the phone.”