Mobile payments growing, no thanks to NFC or Google Wallet
Mobile payment transactions are on pace to hit $235.4 billion in 2013, though mostly through money transfers, as NFC payments and services like Google Wallet have failed to gain much traction.
Gartner on Tuesday published its latest forecast on worldwide mobile payment transaction values, calling for this year to see a 44 percent increase from the $163.1 billion in mobile payments made in 2012. Money transfers alone are projected to account for about 71 percent of total transaction value in 2013.
But near-field communication e-wallet transactions are only forecast to account for 2 percent of total mobile transaction value in 2013. That's because high-profile NFC services like Google Wallet and Isis aren't catching on with consumers, Gartner said.
In fact, the research firm has reduced projected NFC transaction value by 40 percent for its forecast period, which runs through 2017. By then, Gartner believes that NFC payments will still only account for 5 percent of total mobile transaction value.
Rumors of Apple adopting NFC technology in the iPhone have persisted for years, but Apple has instead chosen to avoid wireless "tap to pay" thus far. Security concerns associated with NFC have frequently been cited as a reason for Apple's lack of support.
Instead, Apple last year introduced Passbook, a new feature in iOS 6 that collects store cards, coupons, boarding passes, and event tickets. Some industry watchers have speculated that Passbook sets the stage for Apple to introduce e-wallet functionality to the iPhone, but the company has yet to do so.
While NFC remains a niche, money transfers are expected to remain the predominant use for mobile transactions, remaining at 69 percent of total value in 2017. Most growth has come from money transfers, Gartner said, as users have begun to transact much more frequently, at lower values, due to wider availability of services. Mobile transfer services also frequently see lower transaction costs than traditional banks.
The forecast calls for merchandise purchases to account for 21 percent of total mobile transaction value in 2013. Growth in that segment has been stifled, Gartner believes, because "the buying experience on mobile devices has yet to be optimized."
An expected large growth segment in 2013 is mobile bill payment, which the forecast suggests could grow 44 percent this year. The firm noted that more consumers in developed markets are performing bill payments via mobile banking services, and bill payments will grow to account for 5 percent of total mobile payment value in 2017.
"We expect global mobile transaction volume and value to average 35 percent annual growth between 2012 and 2017, and we are forecasting a market worth $721 billion with more than 450 million users by 2017," said Sandy Shen, research director at Gartner. "Nevertheless, we have lowered the forecast of total transaction value for the forecast period due to lower-than-expected growth in 2012, especially in North America and Africa."
Gartner on Tuesday published its latest forecast on worldwide mobile payment transaction values, calling for this year to see a 44 percent increase from the $163.1 billion in mobile payments made in 2012. Money transfers alone are projected to account for about 71 percent of total transaction value in 2013.
But near-field communication e-wallet transactions are only forecast to account for 2 percent of total mobile transaction value in 2013. That's because high-profile NFC services like Google Wallet and Isis aren't catching on with consumers, Gartner said.
In fact, the research firm has reduced projected NFC transaction value by 40 percent for its forecast period, which runs through 2017. By then, Gartner believes that NFC payments will still only account for 5 percent of total mobile transaction value.
Rumors of Apple adopting NFC technology in the iPhone have persisted for years, but Apple has instead chosen to avoid wireless "tap to pay" thus far. Security concerns associated with NFC have frequently been cited as a reason for Apple's lack of support.
Instead, Apple last year introduced Passbook, a new feature in iOS 6 that collects store cards, coupons, boarding passes, and event tickets. Some industry watchers have speculated that Passbook sets the stage for Apple to introduce e-wallet functionality to the iPhone, but the company has yet to do so.
While NFC remains a niche, money transfers are expected to remain the predominant use for mobile transactions, remaining at 69 percent of total value in 2017. Most growth has come from money transfers, Gartner said, as users have begun to transact much more frequently, at lower values, due to wider availability of services. Mobile transfer services also frequently see lower transaction costs than traditional banks.
The forecast calls for merchandise purchases to account for 21 percent of total mobile transaction value in 2013. Growth in that segment has been stifled, Gartner believes, because "the buying experience on mobile devices has yet to be optimized."
An expected large growth segment in 2013 is mobile bill payment, which the forecast suggests could grow 44 percent this year. The firm noted that more consumers in developed markets are performing bill payments via mobile banking services, and bill payments will grow to account for 5 percent of total mobile payment value in 2017.
"We expect global mobile transaction volume and value to average 35 percent annual growth between 2012 and 2017, and we are forecasting a market worth $721 billion with more than 450 million users by 2017," said Sandy Shen, research director at Gartner. "Nevertheless, we have lowered the forecast of total transaction value for the forecast period due to lower-than-expected growth in 2012, especially in North America and Africa."
Comments
Since you can use Google Wallet anywhere you can use PayPass (in the US), that's a pretty sizable/viable infrastructure (McDonalds, CVS, Home Depot, Rite Aid, Chevron, BP, PETCO, etc.).
The problem is WHY would a consumer want to go that route when they already have their credit card in their wallet/purse? Also, why would I want Google to see my buying habits when it's already bad enough that the bank watches everything I do.
Excuse me? Google Wallet already works on Samsung phones, so exactly what is it that Samsung or Google will copy from Apple when Apple launches "such a payment system for these copycats to copy"? Wouldn't Apple be copying Google in this case?
I think he wants to say others will copy what Apple reinvents .
If Apple do their usual legwork in actually making something that people find useful, no doubt others will copy.
Sorry, what is NFC?
i learned in a high school writing class that when using acronyms, you expand them upon first use and then use the acronym in the remainder of the piece.
so that sentence should have been "... as near field communication (NFC) payments and services ...".
a quick net search shows that what i learned so long ago is still applicable today.
but this is appleinsider, a blog, so don't expect anything even approaching professional writing.
Interesting how this article seems to dismiss NFC just because Apple is not using it. But 2 stories below this one on the AI homepage, there is an article "Apple awarded patent for NFC-based cross-platform data transfer solution". Why would Apple waste time and money working on things that they think people will never use?
That is exactly why it's failing to gain traction...
I give up privacy for bonuses like free Apps and food and drinks. Plus it's quick and easy. Reloading the 'card' is only a few taps away as well, something I've found drains my bank account quickly.
In the future, I suspect I will not even be required to turn on my iPhone, hold it up to the reader, etc.
You should have started that off with IIRC.
This is one area Google actually did well by branding it Google Wallet. Without knowing any specifics the average user will have an idea what it may do.
Quote:
Originally Posted by Suddenly Newton
That is exactly why it's failing to gain traction...
No, the reason it's failing to gain traction is that none of the carriers will let you use it. Most Android phones on the market today are technically capable of using Google Wallet, but unless you have a Nexus, you can't install the software unless you root your phone. When the iPhone 5S comes out with NFC, it will probably require a jailbreak to install it there too.
The reason they're doing this is because AT&T, Verizon, and T-Mobile are working together on their own mobile payment system, called ISIS, and thus Google Wallet is a competitor, so they block it. That's fine, except that ISIS isn't ready yet, hasn't been for a really long time, and progress is amazingly slow — the last news on that front was back in October where they launched trial markets in Austin and Salt Lake City, which are still the only two markets where ISIS exists, and there hasn't been a peep since. Meanwhile, Google Wallet is available at many national store chains all over the US, and it's even on Coca-Cola vending machines and everything — but you can't use it, because the $@#% carriers block it.
I think Sprint might be an exception, but anyone who's on any of the other three carriers and doesn't have a Nexus device (which is quite a large majority of Americans) isn't able to use Google Wallet even if they wanted to, so of course it hasn't been catching on. Gee, I wonder why. That's a mystery all right.
You are drawing conclusions not supported by the facts. The article says that NFC hasn't gained traction as a method of payment, based on Gartner's study, then goes on to say Apple doesn't support it. How did you get from that to "this article seems to dismiss NFC just because Apple is not using it"? Where in this entire article does it make a CAUSAL LINK between Apple not using NFC and NFC's low adoption? This article doesn't say anything of the sort. And where in the article does it "dismiss NFC"? Unless you interpret Gartner's numbers as "dismissing NFC." Perhaps you can enlighten us with a different set of statistics regarding NFC payment use.
1) I use this daily. I may skip a day here or there but I'm certainly over 300 times a year. It really is simple and it updates with the new balance almost instantly, something that didn't happen when the Starbuck's Passbook pass was first released.
My only complaints with using this pass are that I 1) can't adjust the geofence (say I happen to work or live really close to an Sbux), 2) or set times for it not register (like if I'm driving by the store at midnight), or 3) have it stop showing up for a set duration after I've used it or dismissed it (something that is slightly annoying if I'm sitting in Sbux studying).
2) I still want some sort of authentication, especially with NFC. I'd like it to work like AirDrop. If you don't click on it Finder no other device can see you. If we're using NFC it needs to be controlled at that level. If there is a biometric in, say, the Home button that you can enable in lieu of a passcode or direct app access that may work, too, but the window would have to be very short or close up as soon as the transaction is complete so that NFC is then completely shut off.
Quote:
Originally Posted by Suddenly Newton
You are drawing conclusions not supported by the facts. The article says that NFC hasn't gained traction as a method of payment, based on Gartner's study, then goes on to say Apple doesn't support it. How did you get from that to "this article seems to dismiss NFC just because Apple is not using it"? Where in this entire article does it make a CAUSAL LINK between Apple not using NFC and NFC's low adoption? This article doesn't say anything of the sort. And where in the article does it "dismiss NFC"? Unless you interpret Gartner's numbers as "dismissing NFC." Perhaps you can enlighten us with a different set of statistics regarding NFC payment use.
It doesn't take a Mensa scholar to figure out how not being available to over 40% of the US market could hinder a technology's adoption. However, the larger problem is the carriers. Even once the iPhone has NFC, as it probably will soon, anyone using AT&T, Verizon, or T-Mobile (i.e. 73.9% of the market) will have to jailbreak in order to use it.
Quote:
Originally Posted by bugsnw
I love using the Starbucks card within Apple's Passbook feature. It's a prepaid virtual card. I load up $100 and it knows when I'm near a Starbucks and creates a banner to tap. All I do to pay is hold up the barcode to be read from the reader near the cash register.
Good grief! You get a push notification every time there's an opportunity to buy something? I'd be constantly distracted by that and never get anything else done in life! The constant "app update" notifications are annoying enough as it is--why can't they be dismissed and sent away? Apple really goofed up with that.
1) Mensa scholar? You mean Rhodes scholar?
2) Apple not supporting something that is used on the most popular smartphone in the US with the highest satisfaction rating and mindshare will put a damper on adoption, but you state "just because" with an erroneous cause and effect association. There are lots of things Apple has supported that has failed and lots of things Apple hasn't supported that became successes.
3) If and when Apple finally supports any NFC-like system it will likely mean it will be a success because of Apple's track record of being able to take multiple technologies and wrap them into a single unified system that people enjoy using. In no way does it mean they will be successful, but their track record on this is better than most.
4) There is absolutely no history of Apple including HW that will have absolutely no use to the user unless they jailbreak it first. If they add and market NFC they will also SW foundation to go along with it, and likely have deals with various vendors to actually make it useful from day one. The latter would seem to be the harder component to achieve.