Personal Finance

Mobile Wallet Use Expected to Explode

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mobile walletExperts had predicted that the number of people who use their smartphones to make everyday purchases would expand rapidly during the past few years, but the “mobile wallet” hasn’t yet dominated the market as predicted. Now, however, new data suggests that it is at least theoretically possible thanks to increased development and release of devices that are capable of making payments.

The technology, known as near-field communications, is still not available in many of the world’s most popular smartphones, including Apple’s iPhone, but is supported by the Android mobile operating system — and nearly 100 NFC-enabled devices were introduced last year alone, according to new data from Berg Insight. In fact, shipments of these devices grew some 300 percent in 2012, to a total of 140 million units worldwide. Now, it’s believed that the number shipped by 2017 will top 1 billion.

Currently, the most popular way for smartphones to connect with other devices is Bluetooth, as slightly less than 80 percent of all mobile devices come with this capability, the report said. Less than half come with GPS technology, and roughly the same number come with wireless capabilities. Meanwhile, slightly less than one in 10 devices come enabled with NFC. However, that number is expected to explode in the next several years as, by 2017, close to half of all devices are projected to have NFC included.

At the end of 2012, there were about 1.2 billion smartphones in use worldwide, making up slightly less than one-quarter of all mobile phones on the market, the report said. But that number, too, is expected to continue rising at an appreciable rate; sales of these devices jumped some 47 percent from 2011 to 2012, climbing to a total of 690 million, from the previous year’s 470 million. Roughly 62 percent of the world’s population — 4.4 billion people — own some type of mobile phone, indicating that the market for smartphones going forward could be massive.

Companies will certainly have a financial incentive to continue developing and promoting mobile purchasing systems that rely on NFC technology, as projections should it could create an industry worth tens of billions per year. The earlier companies are involved in these systems, such as Google Wallet, the more likely they will be to prepare for when these devices are more widely available.

Image: iStockphoto

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