Payment technologies have evolved over time. In the last few decades, consumers have gone from mainly paying with checks and cash to using credit cards. But one thing that should be remembered is that consumers are drawn towards convenience. This is true in every line of business, but the payment industry is a great example to consider.
Now that tablets and smartphones have reached widespread adoption, the trend in payments is a shift from fixed point transactions using credit cards to purchases made on a mobile device. Talk of a “digital wallet” isn’t new. In fact, it has been speculated for almost two decades that “virtual” payment options would one day achieve widespread adoption.
But we haven’t gone fully digital yet. Cash and card payments are still being used by the majority of consumers. Here’s a brief look at how mobile payments are doing:
- Mobile payment adoption is still in its infancy. As of December 2012, less than 7.9 million consumers in the United States made use of a mobile payment service such as Google Wallet, or any other mobile app that generates a QR code for payment purposes.
- Mobile card readers are gaining. This isn’t just happening at small merchants or young start-ups. Starbucks is now switching credit and debit card processing to Square and as of the beginning of 2013, the “Square Wallet” app can be used to make mobile payments at over 7,000 locations. In 2011, there was $2 billion in mobile payments made by using Square’s services. This went up to $10 billion in 2012.
- In-storemobile payments have skyrocketed. According to estimates done by eMarketer, mobile payments represented $170 million in nationwide transactions in 2011. This amount has shot up to $640 million as of 2012. It is worth noting that these figures only include mobile payments that were initiated by the consumer using an app on their device to complete the transaction and don’t include purchases completed by using mobile credit card readers like those provided by PayPal.
Platforms that are highly popular in the online world, such as PayPal and Google Wallet, enjoy wide popularity among consumers. A 2013 report shows that 72% of consumers knew about PayPal and 48% had used their services (either for online payments or for mobile transactions). Google Wallet also has considerable brand awareness at 41%, even though only 8% of consumers have reported using the platform.