The value of US mobile payments is set to soar over the next few years, from $12.8 billion in 2012 to $90 billion in 2017, according to research house Forrester.
The 48% compound annual growth rate will be driven by 'proximity' payments - transactions carried out in-store using technologies such as NFC - says the Forrester Report. Despite currently accounting for a smaller share of the overall mobile money pie than both person-to-person transactions and remote m-commerce, proximity payments are tipped to reach $41 billion in 2017.
With the likes of Google, PayPal, Square, the Isis consortium of telcos, and the MCX group of merchants all working to bring mobile to the checkout, Forrester says that lower barriers to adoption, increased convenience, and early entrants striving for scale will be important drivers of growth over the next few years.
Despite growth in P2P payments, mobile remittances will lag behind, exceeding $4 billion over the next five years but failing to achieve the scale of proximity payments or m-commerce. Mobile P2P will make up more than 90% of the m-remittance category but will be hampered by its economics, argues the report. Future growth will be made in cross-border remittances and in the rapidly evolving area of mobile bill pay.
Mobile remote payments, or m-commerce - currently 90% of the mobile payments category - will continue to grow modestly, chiefly because they offer a better alternative to shoppers in certain contexts.
In a blog post, report author Denée Carrington says: "Mobile payment and digital wallet providers face significant hurdles to achieving adoption at scale, and 2013 will be a pivotal year in that quest. This year will mark the beginning of the end for some mobile payment solutions as competition heightens and expectations for economic outcomes rise. But those that deliver value, convenience, and a clearly better alternative for both merchants and consumers will thrive as mobile payment adoption accelerates."
Meanwhile, one of the firms hoping to take advantage of the coming boom, Research In Motion (RIM) has had its Secure Element Manager for NFC approved by Visa, meaning that carriers can support Visa issuing banks and financial institutions.