Have Mobile Payments Reached a Tipping Point?

According to Deloitte, they have.

The accounting and consulting firm predicts that this year will see major growth in mobile payment adoption and usage. “Mobile payments and “click-and-collect” services will change the retail landscape,” Deloitte claims.

The forecast is bold, seeing a massive ramp-up of mobile payments adoption from users.

The firm says 5% of NFC-equipped smartphones worldwide will be used for in-store NFC-enabled payments at least once a month, even as smartphone sales slow from 2014.

That’s up from 0.5% of 450 million NFC-enabled phones that the firm believes were used for mobile payments this year.

In other words, the total number of smartphones used for mobile payments will surge over tenfold from 2.25 million to 30 million in just a year.

The report doesn’t state what will drive this massive growth, but the firm argues that “the multiple prerequisites for mainstream adoption … have been sufficiently addressed.” In other words, the industry is ready, and now consumers will come.

There are many reasons to be skeptical of this claim.

For one, mobile payments has seen tremendous fragmentation. Payment providers, tech firms, and retailers do not have aligned interests, so Apple Pay is useless at many pharmacies. You also can’t use it at Walmart or Best Buy.

The technology may be here, as Deloitte points out, but the retail world is not playing nice. For that reason, mobile payments are a lot harder and more confusing for mainstream users than many analysts appreciate.

As a result, the enthusiastic ten-fold growth rate for mobile payments sounds nice, but is probably a bit too optimistic.