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Report adjusts NFC timeline

September 6, 2013 by Jim Ghiglieri — Senior Vice President, Corporate Communications, SHAZAM

Whereas eMarketer once predicted that by 2015, U.S. consumers would spend $20 billion using their phones at the point of sale, it now projects mobile payments will reach that milestone one year later, in 2016. 

Though the mobile payments market is growing more slowly than projected, eMarketer still expects mobile payments in the United States to break the $1 billion barrier this year. By 2017, it expects that number to reach $58 billion.

When viewing these studies, it's important to note the definitions. eMarketer definesmobile payments as "transactions for goods or services made by scanning, tapping, swiping, or checking in with a mobile phone at the POS."

This differs from mobile commerce, which is defined as purchasing items on a mobile device. The researcher predicts mobile commerce sales will hit $38.4 billion this year.

Mobile payments hit a snag over the last year or so, and eMarketer accordingly scaled back earlier estimates for growth. No single mobile payment system has taken off — instead, there's a "congested landscape of competing technologies." The company predicts this congestion will keep growth in check until 2016 or so.

Delays and adoption issues facing mobile wallet initiatives, as well as the jammed landscape of competing technologies affect eMarketer's outlook on mobile payment transaction values, as well.

Of course, these payments today tend to be of the small-dollar nature. However, eMarketer believes that consumers will soon begin to use their mobile devices to make bigger purchases.

The eMarketer report dubs near field communication a "wild card." On one hand, NFC-enabled hardware continues to thrive. On the other, U.S. mobile payment platforms reliant on NFC have failed to take off among consumers and merchants.

The failure of large-scale mobile payment schemes to catch on in 2012 encouraged many merchants and consumers to adopt a "wait-and-see" attitude.

However, with Isis — the NFC mobile wallet joint venture from AT&T, T-Mobile, and Verizon — announcing plans to roll out its service across the U.S. by the end of this year, NFC predictions may receive a boost.

The JV was announced almost three years ago, but suffered delays before it eventually hit test markets last fall. Isis allows consumers to pay for things simply by tapping their phones on an NFC terminal.

Now may be a prudent time to increase your financial institution's internal attention to NFC. Helping your leadership understand the ins and outs of NFC will better prepare them for your evolving mobile payment strategies.

Read more about mobile payments.

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