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Writer's pictureFraud Practice

Mobile Payment Volume at the Point-of-Sale Will More Than Double in 2015

According to a new forecast from eMarketer, U.S. mobile payments at the point-of-sale, including NFC, QR codes and other methods, will grow from under $4 billion in 2014 to nearly $9 billion this year before really taking off in 2016 when mobile contactless payments are expected to exceed $27 billion. The number of mobile proximity payment users in the U.S. is expected to double over this time frame while the average amount each user spends via mobile at the point-of-sale grows nearly threefold.


The combination of U.S. consumers spending more per year at the point-of-sale from mobile devices and continued, albeit slowing, growth in the total number of mobile payment users, will lead to an estimated $210.5 billion mobile point-of-sale payment market in the U.S. by 2019. This marks incredible growth from less than 25 million U.S. consumers spending under $9 billion with mobile point-of-sale payment methods in 2015, to nearly 70 million U.S. consumers spending over $210 billion from their mobile devices at the physical point-of-sale in 2019.


There is no denying that Apple Pay encouraged a lot of mobile payment growth at the point-of-sale after its late 2014 launch, and much of that momentum carried into 2015. Suddenly a rush of consumers had the option to pay with a mobile wallet in-store, and more merchants equipped themselves to accept mobile payments, be it with Apple Pay or another method. Plenty of other major mobile initiatives occurred in 2015 as well. Google expanded their payment platform and reach shifting from Google Wallet to Android Pay after purchasing carrier-owned SoftCard, Samsung launched a mobile wallet of their own after acquiring LoopPay, and the Merchant Consumer Exchange (MCX) launched a pilot program in September. With the increasing acceptance of mobile contactless payments across merchants and more options for consumers, eMarketer estimates there will be over 23 million consumers that make a mobile payment at the point-of-sale in 2015, up from the 16.4 million last year, which included a big late-year push from Apple Pay.


eMarketer measures what they call proximity mobile payments in terms of the number of users and the total transaction volume. This includes any type of payment carried out with a mobile device at the physical point-of-sale such as Near Field Communication (NFC), QR codes or other bar codes, as well as other tap-and-pay or wave systems, like Samsung’s Magnetic Secure Transmission (MST) technology acquired from LoopPay. While NFC seems like it will be the mobile payment transmission method that prevails, as it is utilized by Apple Pay, Android Pay and others, it is important to include all types of mobile payments as there is meaningful volume across other types as well. Samsung reported that roughly 75 percent of all Samsung Pay transactions so far have relied on the MST technology, which does not require most merchants to upgrade their existing mag-stripe card readers.


While the number of consumers in the U.S. who make mobile payments at the point-of-sale is increasing quickly, it is still only a small subset of all mobile users. eMarketer estimates that 10 percent of smartphone owners made a mobile POS purchase in 2014, and this is expected to grow to 19 percent by the end of 2016. By 2019, however, it is forecasted that nearly one-third of smartphone users and more than one-quarter of all mobile phone users will make at least one mobile POS purchase per year.


The most significant growth between now and 2019 is how much each consumer will spend, on average, when using their mobile phone to make payment at the point-of-sale. The average spend per user over the full year was less than $225 in 2014 and is expected to reach $375 this year. In 2016, however, eMarketer calls for average annual mobile POS payment spend to nearly double, exceeding $721 per mobile payment user. According to the eMarketer forecasts, 2016 appears the year proximity mobile payment hit critical mass, as the average spend per proximity mobile payment user is expected to increase to over $1,200 in 2017, nearly $2,000 in 2018 and over $3,000 in 2019. A growing comfort and familiarity with making mobile payments as well as more opportunities to use mobile payment methods with brick-and-mortar merchants will encourage this increase in mobile point-of-sale spending.


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