Mobile Payments Volume Set to Quadruple by 2014

We have already seen this year plenty of reports monitoring the ongoing global explosion of mobile payments, yet every time a new study is released, the numbers are always eye-grabbing.

The latest figures issued by 2ergo, a British mobile technology service provider, predict a quadrupling of the mobile payments volume by 2014, reaching ?ú400 billion ($622 billion) globally. M-payments will finally become mainstream in 2011, according to 2ergo, and will profoundly alter the way businesses interact with their customers.

Mobile commerce has been slow to catch on, but it is now expanding fast and consumers are increasingly becoming more comfortable with using their phones for payments.

“Retailers have the opportunity to build on this appetite by providing smart, effective mobile sites and commerce tools that will move mobile marketing from the fringe and into the mainstream,” says Colin McCaffery, director of products, 2ergo.

Yet, most British businesses are not yet ready to profit from the new opportunities.

“Our own research has shown that 4 out of 5 High Street brands aren’t engaging with their customer base through their smartphones, so there is still massive potential to be explored through intelligent mobile marketing,” according to McCaffery.

2ergo’s report predicts the integration of mobile technologies into retail through coupons and royalty schemes. There are already plenty of start-ups that offer merchants the ability to reach out to consumers through their mobile phones, such as VoucherCloud, and their role is certain to increase with the growth of the m-payment industry.

Another interesting dynamic seen by the researchers is the growth of mobile advertising to the point of taking over online advertising in just three years. Google is apparently seeing the potential too, as evidenced by its recent acquisition of AdMob for $750 billion.

Mobile phone technology is now advanced enough to enable users to easily do their shopping from their phones and retailers are beginning to build mobile websites (mSites) and applications to meet the growing demand. This process is certain to intensify, as mobile commerce keeps gathering momentum.

A trend to keep an eye on is the integration between m-commerce and social networking and specifically location-based services like Foursquare. The location of most smartphones can now be pinpointed, allowing merchants to target users with more relevant offers.

Another smartphone feature that promises to become increasingly useful to merchants is their constant connectivity. In addition to providing a new marketing channel, it offers customer service opportunities, either through chat (e.g. Skype) or instant messaging (IM).

Mobile commerce is set to become bigger than e-commerce in just a few short years and the speed at which this is happening will no doubt surprise many merchants and some will be slow to respond. Yet, whoever fails to catch the wave early enough will find it difficult to make up the lost ground later.

Image credit: Visa.com.