A new report by US research firm GigaOm says mobile payments will reach US$753 billion globally by 2015, a significant increase from the US$32 billion predicted for 2011. The firm says a CAGR of 88 percent will mean m-payments eventually rivalling the e-commerce market which today boasts annual revenue running into hundreds of billions of dollars but only a CAGR of 19 percent.
Underlying the growth in popularity of mobile payments is the rise of NFC technology, says the report. Google is a major player and is central to incentivising merchants to adopt NFC. In fact, the search giant’s role is “paramount”, says GigaOm. “Once penetration rates increase, the value that Google provides will dissipate, but it will have gained a position between the user and merchant that it can leverage to direct settlement to its own service in the future," says the report.
NFC will outstrip rival mobile payment technologies such as SMS-based transactions, quick response (QR) and 2D bar codes, and mobile point-of-sale (POS) systems such as Square and mobile web payments, typically offered by retailers or online merchants such as Amazon and Paypal, says the report. Of the total payments market predicted by GigaOm for 2015, nearly 80 percent will be contributed by NFC-based systems, the firm says. Some competitive technologies such as mobile POS and mobile web will actually benefit indirectly from the popularity of NFC-based payments, GigaOm claims. They will make up the remaining 20 percent of the payments market in 2015.