Javelin estimates that the mobile payment volume for in-store purchases in the U.S. will grow more than tenfold, from $4 billion in 2014 to $54 billion in 2019. However, its mCommerce transactions, those made online either via mobile web browsers or apps, that dominate consumer mobile payments in the U.S. today, representing 95 percent of the total mobile payment volume. Although not growing as rapidly as mobile contactless payments, mCommerce is forecasted to more than double by 2019, when it will then make up three-quarters of the total U.S. mobile payment volume.
Mobile commerce is growing at a torrid pace as consumers in the U.S. and worldwide continue to spend more from their mobile devices, both online and in-store. When it comes to measuring the mobile payment volume it is important to differentiate in-store mobile contactless payments from online mCommerce, just as we track Customer Present and Customer Not Present payments separately. Javelin Strategy and Research estimates that the total U.S. consumer mobile payment volume reached $79.8 billion in 2014 and they forecast this to increase to $217.4 billion by 2019. However, online and multi-channel merchants should be taking a closer look to see how this breaks down for in-store versus mCommerce mobile payments, and also mobile browser versus app payments, to gain a more complete picture in terms of where to invest and allocate resources.
While the late 2014 launch of Apple Pay spurred an immediate increase in mobile payments at the physical point-of-sale, online or mCommerce transactions represented an overwhelming majority of the total consumer mobile payments volume in the United States, comprising nearly 95 percent. According to estimates from Javelin Strategy and Research, U.S. consumers spent nearly $80 billion from their mobile devices in 2014, with $75.8 billion being spent online either via mobile web browsers or mobile apps. This marked a one-third increase in the consumer mCommerce payment volume, up from $56.7 billion in 2013.
When it comes to converting sales in the mobile channel, many organizations have internally debated whether to invest in building a dedicated mobile app or a mobile optimized website. Multiple studies, including the 2015 Mobile Payments & Fraud Survey, have shown that for many merchants the best option would be to offer both. Javelin also found that U.S. consumers who make mobile purchases from both mobile websites and apps accounted for 78 percent of the total mCommerce volume ($59.4 billion). Meanwhile consumers that only used mobile web browsers for mCommerce spent $10.7 billion in 2014, and those who only made purchases within apps spent the least, $5.8 billion.
Looking at the forecasted growth in consumer mobile payments in the U.S. it is apparent that contactless mobile payment methods at the point-of-sale are driving much of the expected mobile payments growth. However, it is important to note that although Javelin predicts in-store mobile payments will realize significant growth through 2019, mCommerce will still comprise 75 percent of the total consumer mobile payment volume in the United States.
According to Javelin’s forecast, total consumer mobile payments in the U.S. will grow to over $217 billion by 2019, an increase of 172 percent in five years. In-store mobile payments are expected to grow 1,250 percent over this same time frame, increasing from $4 to $54 billion. Mobile browser and app payments will not see as rapid of growth, but are expected to more than double from $75.8 to $163.4 billion by 2019.
The main takeaway from these figures is this: Mobile payments at the point-of-sale are already meaningful in the U.S. and merchants should not ignore this $54 billion opportunity. However, when thinking about a mobile payments strategy it is important to consider all channels and aspects. While organizations may focus a lot of attention on NFC, Apple Pay and mobile payments at the point-of-sale, this should be kept in the context of its share of the total consumer mobile payments market, which even after years or rapid growth will be about 25 percent.
For more information: