Research Shows Mobile Payments Growth Rate Exceeds Over All Payment Methods

Mobile Payments Growth

According to the new annual POS forecast released by Javelin Strategy & Research, mobile payment systems will grow to $5.4 billion by 2018.  The forecast predicts strong growth in both mobile and online payments for the period covering 2013 to 2018. Total retail transactions for all POS systems in the US are expected to grow from $3.98 trillion in 2012 to $4.2 trillion in 2018.

The forecast, Javelin Strategy & Research’s 2013 Retail POS Forecast: Mobile and Prepaid Opens New ‘POSsibilities’, contains a number of surprising predictions that retailers and processors should be aware of over the next five years. While gift cards will continue to be an important source of retail POS volume, the forecast says prepaid card volume will overtake gift card volume in 2015. The report also notes that debit card transactions now exceed cash transactions in total volume among consumers from Generation Y.

The split between retail and online sales still strongly favors in-store locations. Retail store volume constituted 93% of POS volume in 2012. The report says it does not realistically expect online volume to catch retail store volume in any year the forecast covers. However, it expects the highest rate of growth to take place in mobile payment processing, particularly on the strength of a major push within the industry toward mobile payment processing. Although a thin 0.01% sliver of total retail sales processed through point-of-sale (POS) systems in the United States in 2012, mobile payment systems will grow to a $5.4 billion by 2018 according to the new annual POS forecast released by Javelin Strategy & Research. The forecast predicts strong growth in both mobile and online payments for the period covering 2013 to 2018. Total retail transactions for all POS systems in the US are expected to grow from $3.98 trillion in 2012 to $4.2 trillion in 2018.

The forecast, Javelin Strategy & Research’s 2013 Retail POS Forecast: Mobile and Prepaid Opens New ‘POSsibilities’, contains a number of surprising predictions that retailers and processors should be aware of over the next five years. While gift cards will continue to be an important source of retail POS volume, the forecast says prepaid card volume will overtake gift card volume in 2015. The report also notes that debit card transactions now exceed cash transactions in total volume among consumers from Generation Y.

The split between retail and online sales still strongly favors in-store locations. Retail store volume constituted 93% of POS volume in 2012. The report says it does not realistically expect online volume to catch retail store volume in any year the forecast covers. However, it expects the highest rate of growth to take place in mobile payment processing, particularly on the strength of a major push within the industry toward mobile processing.

Even where mobile will not exceed retail, the report notes that mobile technologies have permanently altered the retail landscape. Tech savvy shoppers increasingly use their mobile systems to comparison shop in-store. Many also use retail locations to window shop items they intend to buy online.

The report was assembled using data Javelin obtained through two online surveys of more than 6,000 consumers. The surveys polled the consumers’ usage of a diverse mixture of payment options, including cash, prepaid cards, gift cards, credit cards, debit cards, checks, and mobile systems. The goal was to evaluate how well non-card payment methods will hold up in the coming five-year period against emerging methods.

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