The report, “Mobile payment strategies: remote, contactless & money transfer 2014-2018,” reveals expectation for growth surrounding the purchases of tactile goods through mobile devices. Other factors contributing to the growth are expected to be host card emulation solutions, contactless POS and the promise of an Apple digital wallet.

“The prevalent business models for NFC have been unattractive to banks and left them dependent on multiple network operators, each of which may have its own approach to mobile wallet management,” said Windsor Holden, research director at Juniper Research and author of the report.

Preference for payment
Average transactions through tablets have already surpassed those made via desktop computers in many markets.

The report also discovered that while spending via smartphones is increasing exponentially, the primary function by users is to search and discover products, though the final point of sale is preferably made on tablets.

While smartphones accounted for 20 percent of online traffic versus 12 percent from tablets, tablets accounted for 12 percent of online sales against 6 percent on smartphones.

There is similarity in the proportion of time spent browsing and the device base, implying that consumers spend like-for-like time browsing on smartphones as on tablets, but that they are nearly 4 times as likely to make the purchase on a tablet than a smartphone.

In part this could be attributable to the user interface of the tablet being more conducive to entering payment details, but also to where purchases occur, most frequently in the home, with spend migrating from the desktop to the tablet.

Total mobile payments value split by 8 key regions in 2014: $507.5 Billion

Mobile contactless lags
Juniper observed that while progress in contactless mobile payments had been lagging, with few commercial launches, the forecast for the medium term was brighter, following the emergence of cloud-based Secure Element solutions, which can reduce the time-to-market for near field communications solution.

The opportunity for contactless mobile payments has been strengthened by contactless infrastructure deployments, with the majority of POS terminals now shipping with contactless.

Apple’s recent payments patent seems promising for secure transactions to take place over alternate means of proximate connectivity (i.e. Wi-Fi and BLE).

Juniper hypothesizes that Apple will introduce a digital wallet that  allows for secure contactless payments with the launch of the iPhone 6/iOS 7, which the research firm anticipates will occur in September 2014.

An Apple digital wallet would create a halo effect towards contactless payments, and drive an uplift and adoption in usage.

“HCE [host card emulation) solutions have the potential to revitalize a market which has struggled to gain traction,” Mr. Holden said.

Final Take:
Michelle is editorial assistant on Mobile Commerce Daily