New research published by eMarketer confirms that 38.4 million Americans 14 and over will have used their mobile phones to pay at a point of sale at least once in the preceding six months during 2016. According to eMarketer analyst Bryan Yeager, the above-mentioned statistics represent 19.4% of U.S. smartphone users, although the figure is projected to hit 33.1% by 2020.
As eMarketer reports, proximity mobile payment transactions in 2016 will grow 183.3% to $27.67 billion. This figure is projected to more than double in 2017, reaching $62.49 billion. By 2020, proximity mobile payment transactions are expected to hit $314.13 billion.
“More than 90% of US retail sales ($4.45 trillion) will occur in traditional contexts like brick-and-mortar stores this year, which is where consumers primarily make proximity payments,” said Yeager. “Increasing acceptance of proximity payments at a wider array of merchants is pushing average spend via such methods higher, which helps explain why transaction value is growing far faster than the number of users.”
Perhaps not surprisingly, proximity mobile payment users in the U.S. tend to skew young, with 11.9 million in the 25-to-34 age group in 2016, representing 31.1% of the total. By 2020, millennials are projected to exceed 21 million, though eMarketer expects their share to decrease to 27.8% as older consumers begin paying at the point of sale with their phones. In 2017, close to 55% of all U.S. proximity mobile payment users are expected to be under 35, while more than three-quarters will be under 45.
It should be noted that a recent report published by CCG Catalyst stated that millennials are most interested in mobile wallets that seamlessly integrate loyalty cards, boarding passes, ID cards, coupons, event tickets, alerts and notifications. Moreover, a survey conducted by YouGov found that 63% of respondents between the ages of 18-34 are likely to use a mobile- payment app in the future. By 2019, the total number of mobile wallet users – spanning multiple age groups – is expected to hit approximately 90 million.
As we’ve previously discussed on Rambus Press, next-gen mobile payments are likely to evolve into a new retail paradigm that will help redefine a traditional brick-and-mortar experience, which has grown stale and static for consumers and purveyors alike.
For example, mobile wallets housed on smartphones will allow retailers to collate purchasing data and track trends; increase upsell, cross-sell opportunities and brand loyalty; reduce transaction fees with integrated credit card payments; minimize staffing requirements for check-out lines; and free up more store space for actual products. For consumers, mobile payments offer a convenient “tap and go” frictionless commerce experience that effectively eliminates the waiting time EMV card readers have added to transactions. For banks, digital wallets, which are far more secure than credit or debit cards, have fast become a strategic focus as consumer interest ramps up.
Interested in learning more about mobile payments? You can check out our eBook on the subject: