Blog

Mobile, prepaid cards stand out in payments growth

May 22, 2013 by Jim Ghiglieri — Senior Vice President, Corporate Communications, SHAZAM

In a recent report, Javelin Strategy and Research predicts that mobile payments and prepaid cards will beat out cash and checks in popularity among U.S. consumers by 2018. Mobile payments are expected to see the fastest growth over the next five years — jumping from $398 million in 2012 to $5.4 billion by 2018.

According to the report, the positive mobile forecast is due in part to the campaigning efforts of leading networks and financial institutions. Are you a leader at one of these championing FIs?

The report found that, not surprisingly, cash is on the decline. While recent figures indicate that 81 percent of consumers still use cash, those numbers are down two points from 2011.

Facing an even sharper drop at the point-of-sale front are checks, which are expected to account for only five percent of all transactions by 2018. Javelin goes so far as to predict consumers will eventually abandon cash once they grow accustomed to paying for merchandise with digital handhelds.

Cards are expected to see further growth at the expense of cash and checks, reaching heights of 35 percent (credit) and 32 percent (debit) by 2018.

Prepaid cards are also gaining popularity, having racked up sales of $120 billion in 2012 — a number that’s expected to jump to $158.5 billion by 2018.

The attraction here is largely attributed to the way in which some of the leading prepaid cards offer similar features to checking accounts (checking accounts that are increasingly becoming laden with fees).

Although skeptics have cited hardware-upgrade costs as a possible roadblock in the race towards mobile adoption, the Javelin report suggests that anyone meeting the upcoming EMV deadline will beready for the new era in payments.

Due to the similarity between EMV and NFC, Javelin predicts upgrades to the former will lead to greater consumer interest in mobile-payment options.

Where are your customers at in the mobile payments acceptance journey? Would love to hear from you in the comments section below.

About Jim Ghiglieri

---

None

Connect with Jim: