Mobile Payments: Present and Future

Pew Internet: The Future of Money in a Mobile Age

“Recent Pew Internet surveys find that one in ten Americans have used their cell phone to make a charitable contribution by text message, that more than one-third of smartphone owners have used their phones to do online banking services like paying bills or checking a balance, and that 46% of apps users have purchased an app using a mobile device.

Research from comScore has found that 38% of smartphone owners have used their cell phone to make a purchase of some kind, with digital goods (such as music, e-books or movies), clothing and accessories, tickets and daily deals leading the way as the most popular mobile retail categories.

Similarly, a March 2012 Federal Reserve report found that 21% of mobile phone owners had used mobile banking services in the past year and that another 11% of mobile owners plan to use such services in the next 12 months.4 Using one’s phone to check account balances and recent transactions ranked as the most commonly-used service (90% of mobile banking users engage in this activity), followed by transferring funds between accounts (42% of mobile banking users). The study also found that some 12% of mobile phone owners have made payments—such as paying bills online or transferring money directly to another person’s account—via their phones.

Mobile phones play an even more prominent role in the financial system in parts of the developing world—users of Kenya’s M-Pesa system now send money totaling 20% of that country’s GDP to each other each year via text message, for example

…The Pew Internet Project and Elon University’s Imagining the Internet Center invited experts and other Internet stakeholders to offer their predictions on the future of mobile payments, and what people’s ‘wallets’ might look like in 2020.

Overall, a majority of these respondents supported the scenario that by 2020 most people will have embraced and fully adopted the use of smart-device swiping for purchases they make, nearly eliminating the need for cash or credit cards. These experts feel that the explosive growth in the use of smartphones and other mobile devices, combined with the convenience, security, and other affordances of mobile payments systems, makes these systems an obvious choice to replace established modes of payment in day-to-day commerce.

At the same time, the expert respondents are divided on how quickly this technology will displace established transaction methods. In elaborating on their predictions, a number of respondents indicated that they expect this process to develop generationally, with younger users jumping to abandon cash and credit cards while their parents and grandparents make the move to mobile payments slowly, if at all.”

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