The following is a guest contributed post from Toffer Grant, CEO and Founder of PEX Card.
When leaving the house over the past decade, a typical person’s checklist has morphed from “keys and wallet”, to “phone, keys and wallet” to “smart phone, keys… and do I really need my wallet?” With the evolution and growth of mobile payment solutions, now more than ever, you can cross “wallet” off of your mental checklist.
New applications and venues for accepting mobile payments have revolutionized online sales for merchants and consumers alike.
A solution for merchants
Mobile payments can be an amazing solution for businesses as a point-of-sales (POS) tool. Many of the technologies that can turn a phone or tablet into a POS tool still require a credit card. Eliminating credit cards, as well as cash, is a convenience for not only the merchant, but also the customer, which can ultimately increase transaction volume. Take Starbucks outlets for example, a heavily trafficked merchant location that has recently implemented a mobile payment system through their own app. For a business as busy as Starbucks, saving time creates more time for baristas to make the drinks, which also speeds up the sales process and increases the quantity of transactions. And the sooner that under-caffeinated customer receives coffee, the happier he/she is – and everyone knows happy customers can translate into better business. Mobile payments save merchants time when customers are checking out, in addition to providing a sense of security by eliminating cash, and increasing efficiency.
A solution for consumers
Have you ever been stuck behind the person on the checkout line who is rummaging through their change purse to come up with exact change? Or even worse – the person who is paying with a personal check? It’s not fun, and this has persuaded many people caught in that situation to start engaging in the technologies that will help them get out of checkout lines altogether. Not to fear – advances in mobile payment applications are providing quick and seamless solutions for consumers. Instead of carrying around cash, coins and credit or debit cards, everything is in the same place in your mobile wallet. For a busy merchant like Starbucks, mobile payments create increases in effectiveness, productivity, profitability and customer delight. On the consumer side, knowing that payment is possible with a quick tap of a mobile phone takes away the dread of walking into a store with a twenty-person check-out line. Consumers want convenience, efficiency and a pleasant purchasing experience. The explosion of mobile payment technologies and solutions are looking more and more like the answer to these challenges.
Some forecasts on Mobile Payments
Just how big will mobile payments be? Forrester forecasts that US mobile payments will reach $90B in 2017, a 48% compound annual growth rate (CAGR) from the $12.8B spent in 2012. A recent article in Business Insider noted that by 2017, the total value of global offline transactions facilitated by mobile devices will reach about $1.5 trillion, up from $120 billion in 2012. In the U.S., transaction value will rise to $244 billion in 2017, up from $15 billion last year. The number of global mobile payment users is set to explode as well. By 2017, the total consumer user-base will climb past the 500 million mark. That will be more than a five-fold increase from the approximately 75 million consumers who used mobile payments at year-end 2012.