The Mobile Payment Market Ahead: Big Profits, Confusing Choices
Exciting news recently emerged from Javelin Strategy & Research, which released a new report titled “Mobile Payments Convergence: Opportunities at the Intersection of In-person, Online and P2P Payments.”
The report offered one downright explosive truth bomb: mobile retail payments would hit $180 billion this year, and by 2020, would hit $410.5 billion. That, however, wasn’t all that the report had to offer, as there may be some problems ahead too, even if they’re the good kind of problem to have.
The Javelin report went on to note that, over the course of the next two years, a vast array of new choices will emerge and descend on the market like a horde of ravenous wolves descends on an open-air butcher shop. In fact, Javelin projects that the sheer number of new mobile wallets and mobile payment systems in the field will be so vast that the average consumer will get confused.
This in turn might well prompt users, looking for a safe haven, to turn to familiar names, and the most familiar of these is the user’s bank of choice. That means that branded mobile payment apps—particularly those branded with the user’s bank—may fare the best in the growing market.
Of course, there’s one problem with Javelin’s projection, and it’s a statistic we’ve encountered before. For the most part, customers will only turn to so many apps, with some putting the average at about three before they just plain give up and go with what they’ve got.
Sure, some exceptions are made, particularly for individual store-branded apps—someone who’s going to Starbucks anyway will probably use the Starbucks app—but front-of-mind is commonly limited. If the branded banks haven’t brought that app forward already, it’s not too far out of mind to suggest it just might be too late.
The store and carrier apps have a big head start on the banks, and banks’ reputations may not be sufficient to carry the proposition forward into entrenched markets.
Still, regardless of the source, it’s clear mobile payments have been gaining at a frenzied pace for the last couple of years now. That’s not likely to change, and it means big gains ahead for the mobile payments industry as a whole.