We’ve been talking about the future of the digital wallet for almost a year at Inspire Commerce, and we see InspirePay as our humble entre into this world as a technology provider. Our perspective… we need a democratized electronic wallet that allows for transparency in fees, open competition, and simplification of an otherwise complex process – by aggregating the otherwise disparate payment methods that exist in the world today.
Some interesting facts recently published by The Green Sheet…
- The number of mobile payment users is about 354 million people. IEMR (IE Market Research) predicts this will rise to 893 million by 2015, a CAGR (Compound Annual Growth Rate) of 18.4 percent. The gross value of mobile transactions in 2010 was $31.5 billion. This is predicted to rise to $945 billion by 2015.
- SMS was used in mobile transactions 72.1 percent of the time in 2010. SMS use is predicted to decline nearly 20 percent by 2015, but it will still account for more than half the market. Meanwhile, NFC captured only 17.6 percent of mobile payment transactions in 2010, but NFC transactions are expected to take off and more than double by 2015.
- The forecast said, “The decline in the share of SMS transactions is not so much about the technology as it is about adoption of NFC technology in developed markets. … NFC offers the potential ‘sweet spot’ of access to millions of retail POS terminals, something that SMS cannot match as a transaction technology.”
- Merchandise purchases from mobile transactions came to $5.78 billion in 2010. IEMR believes this will increase to $176.1 billion by 2015, a CAGR of 100.1 percent. The survey found the average transaction value of purchased merchandise was approximately $7.22 in 2010. The company predicts this will rise to $10.61 by 2015.”In our view, the key impediment to merchandise purchases … is that it requires an extensive merchant network with pre-registration of the user’s bank accounts or credit cards with the ‘made for mobile’ service,” the forecast authors said.
- Prepaid top-ups are another area where IEMR foresees enormous growth. It estimates current prepaid top-ups at $10.3 billion. The firm believes this will rise to $158.7 billion by 2015, for a CAGR of 70.8 percent. Mobile money transfers, now below $20 billion, are forecast to increase to $114 billion by 2015 – a CAGR of 87.7 percent.
What an interesting time we are living in. The movement of credit card payments from plastic to digital will be a big deal for humanity in oh so many ways. It is an inevitable shift.
Considering the power of the #occupy movement and the resonance of a demanded legitimate democracy in our future, the transition from credit cards to fully electronic wallets will be a delicate transition. Transparency must become the norm… options that are outside the primary four credit card networks must also step forward. May the move to an electronic wallet be one where we can gain in the payments industry what we all cherish so much in this life… freedom of choice, democracy, and honest transparency. For if we don’t, the future could get ugly before it gets better.
Statistics from the November 28th edition 11:11:02 of The Green Sheet.