Tag: mobile commerce growth

Report highlights fragmentation in mobile payments

Mobile payments have been showing strong growth throughout the U.S., but this growth has not been as steady as had initially been expected. This week, the Federal Reserve Banks of Boston and Atlanta have released a new report concerning the expansion of mobile payments. The report suggests an emerging fragmentation in the mobile commerce sector that has served to derail some of the progress that has been seen in mobile payments over the past few years.

Mobile commerce shows modest growth over past two years

According to the report, entitled “U.S. Mobile Payments Landscape — Two Years Later,” the mass adoption of mobile commerce is unlikely without strong support and collaboration from multiple organizations and industries. Over the past two years, mobile payments have grown more popular but have done so under harsh criticism. Mobile commerce has been dogged by concerns regarding security and many of the issues that consumers have with mobile payments remain unresolved due to the lack of interest many companies have in this field.

Multiple approaches lead to slower growth

The report claims that the advent of mobile devices has created an effective way to create a dynamic marketplace for consumers. As mobile commerce entered the limelight, companies, particularly banks and telecommunications organizations, began teaming up to engage consumers in a new form of commerce. Various such partnerships and collaborations have formed over the past few years, with each partnership experimenting with ways to make mobile payments more attractive to consumers. This has lead to some fragmentation as the various parties focus on very particular aspects of mobile commerce.

Non-banks introduce more risk to mobile payments field

While innovation has been encouraged in mobile commerce over the past two years, this also comes with significant risks. Non-bank organizations that are getting involved in mobile payments represent the majority of the risks associated with this sector. This is due to the fact that these organizations rarely have the security experience that financial institutions have and are not held to the same laws that banks are.

The latest data from BI Intelligence has shown that shoppers are increasingly adopting this channel.

The most recent report from BI Intelligence has revealed that m-commerce made up 11 percent of all online shopping throughout the holiday season in 2012, which is a staggering increase over 2010, when it comprised 3 percent of the total.

This amount currently represents about $18.6 billion in consumer spending, not including travel purchases.

This m-commerce growth, according to BI Intelligence is, in part the result of the growing popularity of the channel. The company has predicted that by the end of 2013, its share of the total will have increased to 15 percent of all online purchases.

The report not only examined the proportion of m-commerce, but also examined the cause of its growth.

The BI Intelligence report not only provided the figures regarding the growth of the channel, but it also looked into many of the latest m-commerce trends that can help to explain why the growth is occurring in the way that it is.

The following are some of the reasons that the report used to explain the trend toward m-commerce that is leading it to grow:

• At the moment, more than half (54 percent) of adults in the United States currently own smartphones and about a quarter of American adults own tablets. The report predicts that in three years, there will be more tablets than there are PCs among American consumers. By the end of the year 2016, the worldwide sale of tablets will have reached 450 million.
• Data is already indicating that there is more traffic heading to m-commerce websites than the actual percentage of its penetration. That is, while 25 percent of American adults own tablets, those devices account for 40 percent of the traffic to those sites.
• Almost 50 percent of all smartphone owners between the ages of 12 and 17 years old use that device as their primary connection to the internet. Therefore, among younger consumers, it is more natural for them to use m-commerce as a primary online shopping channel than it is for older consumers.