VeroPay App

One in 5 smartphone uses will mobile payments by 2016.

2016 will be a year of significant growth in technology. The number of people in the US using their phones to pay for goods and services at the point of sale will continue to climb steadily. According to the latest proximity mobile payments forecast from eMarketer, the total value of mobile payment transactions in the US will grow 210% in 2016, according to the latest proximity mobile payments forecast from eMarketer.

eMarketer defines proximity mobile payments as point-of-sale transactions that use mobile phones as a payment method, via tapping, waving and similar functionality.

mobile payment forecast

In 2015, mobile payments will total $8.71 billion in the US, with users spending an average of nearly $376 annually using their mobile phone as a payment method. By 2016, total mobile payment transactions will reach $27.05 billion, with users spending an average of $721.47 annually. Total mobile payment sales will rise faster than average spending per user in 2016 because of the growth in the number of overall users of the technology.

“Several factors will drive substantial mobile payments growth in the US. Mobile wallets like Apple Pay, Android Pay and Samsung Pay will become a standard feature on new smartphones,” said eMarketer analyst Bryan Yeager. “Also, more merchants will adopt point-of-sale systems that can accept mobile payments, and incentives like promotions and loyalty programs will be integrated to attract new users.”

eMarketer expects there will be 23.2 million people in the US using proximity mobile payments in 2015. By 2016, that will grow 61.8% to 37.5 million. Even as more consumers adopt the technology, there will continue to be a gap between younger and older generations. In 2015, 17.5% of 25- to 34-year-olds will use a mobile payment method, vs. just 3.5% of those 65 and older. By 2017, 37.0% of the younger age group will have adopted the technology, compared with just 6.3% of the 65 and over group.

mobile payment user

“Younger consumers generally have fewer apprehensions when it comes to experimenting with and eventually adopting new technologies,” said Yeager. “That’s certainly true for mobile payments, where security concerns are more pronounced among older consumers. Ultimately, mobile wallets will need to have a strong track record of security to attract more users across all demographics long-term.” Also driving growth are changes in the types of purchases made using mobile payments. eMarketer expects that consumers will move beyond primarily buying low-priced goods, below $20, with mobile payments to a wider array of price points. In 2015, medium-priced purchases, ranging from $20 to $100, will comprise 45.5% of all mobile payment transactions in 2015, growing to 63.9% by 2018. Low-priced transactions will decline in proportion throughout the forecast period.

Image credit: Wikipedia

Article via eMarketer