Though more people — mostly the young — are using mobile wallet apps, industry analysts foresee sluggish growth ahead.
In the U.S., mobile wallet options include Apple Pay, Android Pay, and Samsung Pay, and branded apps like Starbucks, Walmart Pay, and CVS Pay.
“This year, 38.4 million Americans 14 and over will have used their mobile phones to pay at the point of sale at least once in the preceding six months,” according to eMarketer. “That’s just 19.4 percent of U.S. smartphone users. By 2020, that figure will grow to 33.1 percent of smartphone users.”
What’s the hold up?
“There are several reasons why U.S. consumers aren’t yet making proximity payments en masse,” notes eMarketer analyst Bryan Yeager. “There are still concerns about security, a patchwork of merchant acceptance, and a lack of perceived value in replacing the use of cash or card with the tap or scan of a smartphone.”
Yeager anticipates that those consumer concerns will be addressed in the coming next few years. As a result, mobile pay could surge.
In 2016, proximity mobile payment transactions will grow 183.3 percent to $27.67 billion. Next year, the total could reach $62.49 billion. By 2020, proximity mobile payment transactions are expected to equal $314.13 billion.
“More than 90 percent of U.S. retail sales ($4.45 trillion) will occur in traditional contexts like brick-and-mortar stores this year, which is where consumers primarily make proximity payments,” said Yeager. “Increasing acceptance of proximity payments at a wider array of merchants is pushing average spend via such methods higher, which helps explain why transaction value is growing far faster than the number of users.”
In the meantime, mobile peer-to-peer (P2P) payment apps — think Venmo and Square Cash — have been more widely adopted by consumers. The data shows that 45.8 million adults (about 25 percent of U.S. adult smartphone users) will use a P2P payment app at least once per month.
