Mercator: Mobile Payments to be 25 Percent of Total Card Use By 2020

Mobile payments have been in kind of a limbo state for the last couple of years. While some evidence has shown up to suggest they’re ready for a breakout any day now, that breakout never seems to actually, you know, arrive. Now, Mercator has released figures suggesting that mobile payments are once again poised for a breakout, and this one could be bigger than ever.

Mercator’s projections say that mobile payments volumes will reach one dollar out of every four spent on a credit card by 2020, and will account for one in every five dollars of retail spending by that same time. This includes a lot of different subgroups, so it’s really not that outlandish; it includes card-on-file transactions, like utility bill payments or Amazon purchases, and also where “trusted networks” are involved.

That’s a big deal by itself, but Mercator also looks for credit cards to continue their overall dominance. Credit cards are now considered by banks to be a major part of a wider strategy to get in on the digital market, and are also being used as inducement to pull in the digitally-savvy consumer. Debit cards are also a big part of the market, though not quite as big; customers commonly consider debit cards somewhat riskier since it’s their own money involved in a debit card, as opposed to a credit card company’s money.

Considering that, to a certain degree, credit and debit cards are both themselves mobile payments systems, and even found the bedrock of mobile payments systems—what’s one of the first things that have to be done when setting up an Apple Pay account, or even a Starbucks mobile system?—Mercator’s projections aren’t out of line here. It’s interesting to see more users add the intermediary step of a mobile wallet system in there, but perhaps, we’re just getting to the point where people would rather pay with their smartphones than carry both smartphone and wallet around.

The concept is valid enough, and as mobile payments platforms improve their overall security and offer more benefits for the end users like loyalty programs directly connected to the platform, more users will likely jump in, giving Mercator’s projections that extra dose of reality.