KEY POINTS

  • In our latest US in-store mobile payments forecast, we find that mobile payment volume will reach $37 billion this year. This is about half our previous estimate of $74 billion in mobile payment volume in 2015, and the downward revision is primarily the result of later-than-expected launches of major mobile wallets from big tech players.
  • But by the end of the forecast period in 2019, we expect volume to reach $808 billion, or about 99% of the old estimate. Our forecast is still one of the largest in the industry, and we think mobile payments will catch on faster than other research firms suggest: Mobile payment capability is either already offered or about to be implemented at merchants accounting for a huge chunk of US payment volume.  
  • The number of people who make a mobile payment at least once a year will grow from nearly 8% of the US consumer population in 2014 to 65% by 2019. The growth in mobile payment users will largely be driven by mobile wallet initiatives from Apple, Samsung, and Google. When these are in place, 90% of the forthcoming smartphones in the US will come with mobile wallets preinstalled. 
  • Samsung Pay will be a huge driver of mobile payment volume. Unlike Apple Pay, when Samsung Pay launches it will be compatible at virtually every payment terminal in the US, thanks to the company's acquisition of LoopPay. This will make it easier for early adopters to make a habit of paying with their phone. 
  • The sheer number of high-profile mobile wallets available or in the works from Apple Pay, Samsung Pay, CurrentC, Google Wallet, and others will drive mobile payment adoption as well. This will largely be the result of competitive pressure building between the companies and the bandwagon effect. Adoption will be self-reinforcing — the more consumers and retailers that use or offer mobile in-store payments, the more the behavior will catch on among others. 
  • But even as mobile payments competition increases, it's important to note that the big tech companies aren't all after the same objective. For Apple, introducing Apple Pay is about continuing to improve the mobile experience, whereas for PayPal the goal is a greater share of retail dollars. For Google, meanwhile, it's about gaining further insight into consumer behavior to boost [...]