Mobile Payments Growth Rising, but Overall Growth Rates Slowing
So there’s good news and bad news out recent from the Electronic Transactions Association, particularly for anyone who follows the mobile payments market like we do. The good news is that overall use of mobile payments systems is up, says the ETA. The bad news is that the rate of growth is in decline, and now represents the slowest growth rate in years.
The numbers look pretty good on first glance; US consumers routed $64 billion in spending through mobile wallet or the individual payment apps issued by companies last year. That’s also up substantially from 2017’s figure of $45 billion. However, the problem with that is that the gains were much larger in the period between 2016 and 2017 than in 2017 to 2018.
In 2017, the total was up 51 percent over 2016. The growth between 2017 and 2018 slowed to 42 percent. Now, if everything remains stable, the growth between 2018 and this year, once it concludes, is expected to hit just 37 percent. That will still mean a hefty $88 billion funneled through mobile payments apps, but the numbers aren’t growing like they once did.
Causes of the decline aren’t really addressed, but the rise of contactless credit cards was cited as one possibility. Since contactless cards use the same technology as mobile payments operations—particularly near-field communications (NFC) systems—some customers may be sticking to something a little more familiar than making the jump to their phones. Concerns about security and privacy, meanwhile, are still present but are less than what they were thanks to ongoing advances in the field.
It’s also a fairly safe bet that we’re looking at a maturing market. Most of the initial gee-whiz factor has been baked in already, and what we’re left with is the hard core of users, alongside a few stragglers still getting into the market in earnest. The technology has been around for several years already, and large-scale growth rates simply aren’t sustainable. Eventually any market finds its fullest capacity, and starts making only token gains if any at all.
Still, the fact that we’re nudging up on the nine-figure mark is a bit of a wonder in and of itself. Mobile payments are one big market, and a market with plenty of developments to track.