Juniper recently released a study that examined the use of mobile payment transactions in retail POS. Their research suggests that mobile payments could exceed $1.3 Trillion by 2017, powered by the sales of physical goods by remote purchases and NFC (near field communication) transactions. According to Juniper’s research, NFC transactions will account for 54 percent of the total value of mobile payments during the next five years.
The report, Mobile Payments Strategies: NFC, Remote Purchases & Money Transfer 2012-2017, found that growth would primarily be driven by sales of physical goods by both remote purchases and NFC transactions. The projections are not so great on a global scale, however, as the report predicts mobile phone POS transactions at around 4 percent by 2017.
There are a couple of other caveats, as well. Juniper notes that the technology must keep pace, and that marketing of NFC as a retail payment solution must be amped up, especially in the areas of consumer awareness. Report author Dr. Windsor Holden stated, “While we are now seeing significant deployments of contactless infrastructure, consumer awareness is extremely low. Thus, it is imperative for all members of the NFC value chain to engage with the public to heighten its profile as a simple, intuitive payment mechanism.”
In formulating the basis for the study, researchers sought answers to 10 primary questions, ranging from identification of major players in the mobile POS field, challenges faced by companies looking to introduce this technology, the impact of smartphone fragmentation on mobile payments, billing mechanisms, and regulatory requirements.
In compiling the study, Juniper researchers looked at mobile retail POS activities of more than 100 companies, including major retailers such as Walgreen’s and Toys-R-Us, as well as credit card companies (MasterCard, Visa, Chase) and payment transaction companies (PayPal). They interviewed key personnel from more than a dozen companies, including Accenture Mobility Services, Alcatel-Lucent, DonRiver, Ericsson and Neomobile. Case studies are included on five companies, including eBay and Google Wallet.
The meteoric rise in the use of smart phones for mobile POS payments is comparable to the introduction of credit card usage some two decades ago. Consumers are now more confident, however, about security features and convenience, which could make the path to NFC payments more easily navigable and the Juniper study’s predictions realistic.
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