Mobile Payments Surge Coming to America

September 3, 2010

A new report from MarketResearch.com predicts Americans will make nearly $6 billion in mobile payments in 2016, or an 86% increase over 2009 payments, as near field communications (NFC) technologies continue to gain steam.

Yet, that's still only a fraction of the potential market, which could be as much as 20% of yearly payments made in the U.S., MarketResearch said, pointing to "the growing GEN Y population as well as the huge underbanked and unbanked population."

Although some companies have experimented with the notion of facilitating payments by text messaging, NFC (a short-range, high-frequency wireless technology) has broad support from banks, consumers and device manufacturers. In fact Apple just hired a world renowned NFC expert to manage its mobile commerce operation, according to published reports.

Adoption of NFC-based mobile payments remains minimal among Americans. Yet, it's a natural extension of mobile phone adoption. Today more than 94% of Americans owns a mobile phone, and MarketResearch estimates that about 60% of those phones have built-in slots that can accommodate NFC proximity cards.

Last year, Americans made $5.2 billion in mobile payments, or about 6% of all payments worldwide, MarketResearch reported

Globally, mobile payments are increasing at a combined annual growth rate (CAGR) of 49.19% and will reach $56.7 billion by 2016, the firm predicted, with U.S. transactions equaling about 10.6% of that total.

Fewer than 2% of the world's poor have access to financial services other than those provided by unregulated moneylenders.