There’s a big payoff for the winner of the race to change the way you pay
Mobile payments see growing acceptance as volumes surge
Cash or check? How about smartphone. In 2014, customers in U.S. retail stores made an estimated $5.5 billion in purchases using a mobile device. That’s only about 0.1% of the nation’s sales. In 2019, however, shoppers are expected to spend an estimated $819 billion using a mobile device, or about 15% of sales, according to researchers at BI Intelligence. If correct, mobile payments may grow at a five-year compound annual growth rate of 172%, creating intense competition to provide digital wallets.
While there have been a variety of mobile-payment efforts during the past few years, notably PayPal, the introduction of Apple Pay last year raised the profile of this potential transition in the way people pay for goods and services. Less than 72 hours after its debut, 1 million credit cards had been used on the service. Google recently unveiled a mobile payment system called Android Pay that will compete with Apple and Samsung Pay, and PayPal recently announced the acquisition of a mobile-wallet maker.
The movement toward mobile payments languished for some time, but there now seems to be growing acceptance among businesses and consumers. Retailers from Wal-Mart to Whole Foods see mobile payments as the future, providing opportunity for numerous companies that facilitate the transactions. The CEO of a Dutch semiconductor company called 2014 “a very good year.” Why? Because the company makes chips that help power the mobile payments system in Apple’s iPhone 6.