Forget cash and credit cards. Smartphones are becoming increasingly more popular as a means of making purchases for many people, new research has found.
That research, which is part of a new eMarketer report, found that mobile payments made on smartphones will top $1 billion this year. That makes it the first year that transactions will eclipse $1 billion.
Mobile payments include transactions completed by swiping, scanning, tapping or checking in with a smartphone. They do not include payments or purchases made by visiting websites or apps on a smartphone.
If past growth is any indicator of future growth, mobile payments will only continue to grow in the coming years. From 2011 to 2013, mobile payments more than tripled, reaching $170 million in 2011, $540 million in 2012 and $1 billion this year. Mobile payments are expected to hit more than $2.5 billion in 2014 and reach close to $10 billion in 2015. The eMarketer research projects growth to nearly $27 billion in 2016 and nearly $59 billion in 2017.
That growth can be attributed to a number of factors, researchers say. A chief driver of this growth will be consumers using mobile payments to make smaller, daily purchases. The researchers expect consumers to experiment with those purchases as near field communication (NFC) technology rolls out in more devices. That familiarity will ease concerns of consumers making mobile payments and eventually lead consumers to make larger purchases on their mobile devices.
"Consumers will also need to find the experience of using a mobile payment platform sufficiently convenient and valuable enough to encourage repeat use," the eMarketer report said. "Integration of proximity payments with other mobile commerce activities will contribute to increased consumer awareness and use, encouraging uptake, while concerns about security and smartphone battery life will gradually ebb as consumers grow more familiar with the different systems available."