A report released this week provides fresh new evidence that mobile payments are by far the fastest-growing payment channel in the U.S. Consumers, especially those in the age group 18 – 34, are becoming increasingly comfortable with using mobile phones to do their banking, driving the exponential growth of the sector.
The number of bills paid by Americans through their mobile phones will grow by 377 percent between 2010 and 2013, according to a report from Aite Group, a research and advisory firm based in Boston. By comparison, during the same period the number of bills paid through other channels will change as follows:
- Bills paid online will grow by 18 percent.
- Direct debit payments will grow by 4 percent.
- Payments called in by phone will grow by 1 percent.
- In-person bill payments will decrease by 5 percent.
- Mail payments will decrease by 6 percent.
In absolute numbers, the two fastest-growing bill payment channels still lag far behind the more traditional methods. In 2010, according to the Aite Group report, the number of check payments sent by mail will be close to five billion, accounting for a third of all payments, while the sum of online and mobile payments will account to only 23 percent of all bills paid in 2010.
Yet, even at the present growth rates, mobile payments alone will surpass check payments in just a few years. But other reports suggest that growth rates are actually speeding up, spurred by the wider adoption of smart phone whose capabilities now surpass these of many laptops from just a few years ago.
“There’s an emerging segment of consumers – which we call Smartphonatics – that will lead to an increase in the use of the online and mobile channels for paying bills,” says Ron Shevlin, senior analyst with Aite Group and co-author of this report.
The trend of rising mobile payments is far from confined to the U.S. market. Globally, 1.5 billion consumers will be the recipients of international mobile payment remittances by 2012 and the total volume of the remittances could reach $1 trillion, according to the GSM Association, a Mobile Standards Organization.
Overall, the global volume of mobile payments, or m-payments, (i.e. how much consumers spend) will be $170 billion this year, growing to $630 billion by 2014, according to a report by Juniper Research, a publisher of market and technology research reports. In India alone, more than 500 million people will make m-payments in 2014, the report said.
So mobile payments are poised for a huge growth in the coming years and unlike other technology waves, this one will wash over the whole world. In fact, for a long time less developed countries were the leaders in adopting the new mobile technologies and it is only now that the big economies are jumping on the bandwagon.
Image credit: TheInquirer.net.