Gartner Forecasts Suggest Surge in Mobile Payments by 2018

Gartner Inc., a Connecticut-based market research and technology firm, provides fresh insights on the future of mobile payments.

The group is of the view that over half of consumers in thriving markets will be using a handheld device (smartphones or wearables) to initiate wireless transactions by 2018. To meet this demand, merchants must be ready to cater to the growing number of early adopters.

“Product managers must understand who their customers are for these new devices and services, and how the products are being used,” Gartner analyst Amanda Sabia said in a statement. “Knowing your customer is imperative in order to capture a fair share of spending opportunities in this dynamic marketplace.”

The firm also predicts that large brands, such as Apple, Samsung and Google, may not necessarily have the upper hand in the space. Such companies that offer pre-installed mobile wallets are likely hindering adoption of their products. While branded mobile wallets from retailers and banks could have a wider reach due to their lax requirements for installation.

Greg Sterling, vice president of strategy and insight at the Local Search Association, agrees with the aggressive predictions made by Gartner.

He added that before mobile payments hit mainstream markets, businesses will see an increase in e-commerce and offline services-related in-app payments.

Lastly, the spread of applications that cater to TV-style content could present several opportunities for startups.

“The increasing prevalence of application-based TV-style viewing will be disruptive to the traditional pay-TV market. Consumers are already cutting back on premium pay-TV channels in favor of subscription video on demand services such as Netflix and Hulu Plus,” said Gartner analyst Derek O’Donnell.

“We expect that this phenomenon will continue to accelerate over the next three years, putting pressure on the revenue of pay-TV operators, particularly from premium channel subscriptions.”