If you have never used your smartphone to make a payment, chances are you will in the next three years. That’s according to Gartner who says that global mobile payments will rise to $617 billion with 448 million users by 2016, at an annual growth rate of 42%.
This year global mobile payments are expected to hit $171.5 billion, up 62% from 2011. This extraordinary increase has been buoyed by the proliferation of NFC in smartphones, and retailers’ realizing that users want alternative payment options that don’t involve plastic.
Earlier this month, Rogers and CIBC announced the first joint NFC-based mobile payment system in Canada, utilizing existing touchless credit card terminals. It will allow you to activate a CIBC Visa or Mastercard onto your BlackBerry smartphone (expanding to Android at a later date) and pay for items wherever a touchless terminal exists.
Still, before NFC takes off (which is expected by 2016) existing forms of payment such as SMS and the mobile web will predominate. Many companies provide apps to pay for items in store, such as Starbucks, or have mobile portals on which customers can order items to be shipped or picked up in store. Such mobile web payments are expected to continue to dominate the market until 2016 or later.
Starbucks’ app is expected to be imitated by other companies as they seem proprietary ways of keeping customers interacting with their brand.