Mobile Payments Will Top $1 Trillion by 2017, Report Finds

IDC Financial Insights, a research firm, released a new study predicting rapid growth in m-commerce and NFC payments over the next five years.

Total volume of purchases made with mobile devices will top $1 trillion worldwide by 2017, new report released by IDC Financial Insights, a research and consulting company, found. The research in "Technology Selection: Worldwide Mobile Payments 2012-2017 Forecast" indicated that most of this purchase volume would come from mobile commerce, which includes digital media consumed on mobile devices as well as e-commerce conducted on mobile web browsers. The reported concluded that such e-commerce spending on mobile devices will be the number one driver of mobile purchases.

Despite recent setbacks for the adoption of NFC technology here in the US, IDC predicted that NFC payments will grow rapidly in the next five years with handset and point-of-sale upgrades. Point-of-sale payments will be the second most common type of mobile purchases, the report said, with P2P payments coming in third.

Regardless of whether NFC payments or m-commerce is the most common form of mobile purchases, IDC suggested that banks are still in a strong position to take advantage of these trends because they will probably continue to be driven by traditional card products. Banks should look to incorporate their card products into NFC payment systems in the near future to take advantage of that, the report said. Banks that do so will be able to leverage the data that they already possess concerning their customers' shopping habits. IDC's research found that customers will favor mobile payments products with the best rewards and loyalty programs, so banks should look to add supplemental rewards programs combined with targeted marketing to attract customers who use mobile payments.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio