Mobile Payment Industry Estimated To Reach $37 Billion In 2015 Led By Apple Inc. (AAPL), Google, Samsung And PayPal
The mobile payment industry is heating up and Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOGL) are expected to lead the drive in getting people to pay for purchases with their smartphones. The other players in mobile wallet whose participation is also expected to drive major changes in the industry are Samsung Electronics and PayPal, which is currently part of eBay Inc (NASDAQ:EBAY) but is set to be spun off.
Services like CurrentC, backed by a consortium of retailers including Best Buy Co Inc (NYSE:BBY), are also expected to boost the drive to make mobile wallets commonplace.
U.S. payment industry
The U.S. mobile payment market is expected to reach $37 billion in transaction volumes this year. However, more rapid growth is expected soon after Samsung Pay and other mobile wallets are launched, with volumes possibility reaching $808 billion in 2019.
It is expected that once the major mobile payment providers like Samsung and Google launch their offerings, nearly 90% of new smartphones launching in the U.S. will come with preloaded mobile wallets. As a result, 65% of the U.S. consumer population is expected to use mobile payment at least once in a year by 2019. The percentage of U.S. consumers using mobile payments at least once a year was just 8% in 2014.
Mobile payment backing
The availability of more smartphones that support mobile payments will also boost adoption, especially as merchants also move to implement in-store mobile payment systems. Apple Inc. (NASDAQ:AAPL)‘s Apple Pay currently boasts support of more than 700,000 stores and Google’s Android Pay is expected to have the same backing by the time it launches.
Challenge for mobile wallets
The challenge for Apple Inc. (NASDAQ:AAPL), Google and other mobile wallet providers is in getting small merchants on the mobile payment bandwagon. It has been reported that small businesses are finding themselves better off accepting cash or credit cards than going through the trouble of implementing mobile payment systems.
For example, the businesses have to upgrade their POS systems to support Apple Inc. (NASDAQ:AAPL)’s Apple Pay and train staff as new mobile payment options come to market. It has been cited that Apple and other providers of mobile wallet could do better by offering reimbursements of incentives for small merchants to entice them to back their systems.
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