2012
11.08

I was recently in a Starbucks and witnessed—for the first time—a customer using a mobile phone to pay for a cup of coffee. Both the patron and barista seemed excited to make the digital exchange, but it caught me a bit off guard. Was this really the first time I observed a mobile trade take place?

The mobile wallet is by no means a new concept. Google first introduced Google Wallet, an app that makes your phone your wallet, in May 2011. Big news continued to flood the market, including a number of announcements at Mobile World Congress 2012 from the likes of eBay, Visa, and MasterCard.

Yesterday, MasterCard also announced a joint trial with ING Group, which is currently underway in the Netherlands and will run through the first quarter of 2013. The companies are testing how the MasterCard PayPass application can securely be used to make a purchase in a store or online, converging the physical and digital world.

As far as retail chains go, Starbucks has been one of the leaders accelerating the use of mobile payments. In addition to its existing line of iPhone and Android mobile payment applications, Starbucks also recently partnered with Square in August. Beginning today, consumers will be able to use Pay with Square to make purchases at participating Starbucks.

Even with all these advances, to my recollection, I have only witnessed one mobile transaction occur. This got me thinking: How often are mobile payments being made today? A report “What’s Next for Mobile Money” released from Yankee Group yesterday uncovers new opportunities for the mobile-money marketplace.

In particular, the research firm suggests only a little more than a quarter of payment decisionmakers believe NFC (near-field communication) is ready for primetime and predicts NFC will not overtake QR code usage until 2016. The analyst firm does, however, indicate consumers using their camera to scan a barcode almost doubled between 2011 and 2012, with about 25% of consumers doing mobile couponing today.

Going forward, ABI Research predicts NFC mobile payments will rise from $4 billion in 2012 to $191 billion in 2017, breaking the $100 billion mark in 2016. The market analyst suggests transportation and ticketing will be the first market to benefit.

Certainly, the technology is not new, but continues to advance with companies such as MasterCard and Starbucks offering more ways for consumers to take advantage of mobile payments. As you hit the stores this holiday season, look for shoppers paying with mobile phones. Chances are more consumers will be using this method of payment in the coming months.

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