Mobile contactless payments are growing at a nearly 31% compounded annual rate and will exceed $1 trillion worldwide by 2022, according to a new forecast from 451 Research.
The prediction is contained 451’s Global Unified Commerce Forecast, which estimates that total online commerce accounts for about 10% of purchases currently, but is growing at more than six times the rate of in-store sales and will hit $5.8 trillion in 2022. 451 compiled its forecast from public and proprietary data pertaining to more than 60 countries provided by payment processors, merchant acquirers, gateways, payment card issuers, and government and other sources, according to Jordan McKee, research director for customer experience and commerce.
451 Research predicts that mobile-commerce transactions will exceed global e-commerce transactions through desktops and laptops as soon as 2019. “Mobile has already become the primary computing platform for the world’s population, and next year it will become the top digital-commerce platform for consumers around the globe,” New York City-based 451 Research said in a news release. “Mobile will increasingly be the first, and often the only, touchpoint retailers will have with a shopper.”
The global compounded annual growth rate of mobile commerce through wallets such as Apple Pay, Google Pay, and others that use near-field communication technology to enable contactless payments is 30.7%, according to 451 Research. While the U.S. is considered a mature payments market, it’s more than holding its own in contactless mobile payments with a 34% annual growth rate, according to McKee.
451 Research predicts that NFC-based mobile wallets will account for $65.8 billion in U.S. in-store sales this year, but grow to $210 billion by 2022.
Driving the increase “is a confluence of factors, generally speaking a growing comfort with using a mobile device for transactions,” McKee tells Digital Transactions News. He also points to the growing number of contactless-enabled point-of-sale terminals at retail locations and the expected addition of contactless payments in some big-city transit systems, notably Boston and New York.
Even so, contactless mobile payments will still not have much market share. The payment form will account for only 1.4% of U.S. store sales this year and 4.1% by 2022, according to the forecast. Worldwide, contactless mobile payments’ share of brick-and-mortar sales is 1.4% this year and is expected to hit 3.8% by 2022.
“Despite the fairly strong pace of growth, mobile NFC transactions remain a drop in the ocean compared to the overall spend,” McKee says.
But combine mobile with other forms of digital commerce and you’ve got a payment platform heading toward the $6 trillion mark. 451 Research predicts that China this year will become the world’s first $1 trillion digital-commerce market. In the U.S., total online and mobile commerce will grow from just over 10% of store sales to about 16% in 2022, McKee says.