Mobile Payments Growth in 2017: What to Expect
Mobile commerce experienced another year of impressive growth in 2016, expecting to account for £25.2 billion in retail revenues, a 25% jump on 2015. Analysts are anticipating m-commerce will exceed 10% of the total retail market by 2020, according to an eMarketer study.
Tablets still account for the majority of m-commerce sales, although the balance is tipping in favour of smartphones, with searches increasingly resulting in a purchase. In a few years it’s predicted that smartphone shopping will be more popular than tablet-based retail.
Japan is the only country with a higher percentage of retail sales through smartphones, with more customers in the UK searching for (and buying) clothing/apparel/accessories than any other sector. Holiday, travel and events are also popular search terms, with a lot of pre-booking research conducted on smartphones.
Retail, however, is not the only sector making the most of the higher conversion rates that can be achieved by providing customers with an enhanced mobile experience. Banking, gaming, entertainment and local governments are aligning digital experiences around evolving consumer needs.
A Mobile Banking Revolution
Consumers need a universally convenient banking experience. Right now, too many mainstream banks are failing to deliver banking services through smartphones. Digital challenger banks and peer-to-peer payment services and lenders are attempting to give consumers and businesses some of the things they can’t access through banks.
Demand for change is already driving forward innovation. However, now the Competition and Markets Authority (CMA) has stepped into to ensure “that customers must have the capability to apply for loans, overdrafts and mortgages on their mobile phone as well as be able to transfer money between accounts” by 2018. Although some push back on that timescale is expected, we should see new services delivered through mobile banking apps this year.
Mobile Gaming Trends in 2017
Virtual Reality (VR) is currently in a chicken and egg situation. There is not enough content for consumers to adopt at the rates companies like Samsung, PlayStation and Facebook (via Oculus) hoped, so adoption rates are slow, which is why developers aren’t jumping in to create content. Investment in content, improved interfaces with smartphones and lower prices should change this, thereby increasing adoption rates.
The free-to-play model could also evolve throughout 2017 since many games developers are starting to question whether a small percentage of users can truly support the investment in each game. Mobile gaming and in-game purchases aren’t going away, but we should expect more content behind paywalls. Although the impact of Nintendo launching a ‘free-to-start’ model, with a spending cap (in the case of Pokémon Picross on 3DS this is set at $32) will influence how other studios innovate in 2017.
Local Governments and Smartphones
Councils deliver over 600 different services to the UK public. According to a Department for Communities & Local Government report in 2015, a faster digital services delivery rate would unlock £5 billion worth of cost savings over ten years.
Local governments that put mobile at the forefront of service delivery are already generating 25% year-on-year savings, according to recent studies. Another report, examining different service methods, including online, phone and in-person found that digital self-serve is 50x cheaper than face-to-face. These are cost savings councils cannot afford to ignore. Not only that but the public – taxpayers – expect services that are more convenient for them. We can anticipate higher digital adoption rates by councils in 2017.
Over the course of this year, consumers will benefit from more services than ever appearing on their smartphones, from dealing with local councils to applying for a mortgage. Consequently, payment companies and security systems will need to accommodate higher mobile demand and should ensure consumers are better protected than ever before.
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