The availability and use of mobile payment options is projected to explode in the coming years. A 2013 report by Forrester Research predicted that mobile payments in the United States will hit $90 billion by the end of 2017.
Although the types of implementation and technology can vary greatly, mobile payments refer generally to the use of a smartphone or other mobile device to pay for goods or services. The growth of mobile commerce, or m-commerce, has made it incumbent on retailers to develop effective marketing plans that capitalize on mobile’s strengths, such as the ability to target potential customers based on their physical location and the greater likelihood of capturing impulse buyers.
A 2012 report by Javelin Strategy & Research found that U.S. consumers used mobile devices to make purchases totaling more than $20 billion in the first nine months of that year. Roughly 25% of that amount was spent by consumers using tablet computers. The Javelin study also found that consumers spent about $10 more per purchase when using a tablet as opposed to another type of mobile device.
“Tablets have been particularly pivotal in the movement of online retail payments from the PC to the mobile device,” the Javelin report noted. “Larger-screen real estate, without sacrificing mobility, has allowed the tablet to capture a substantial portion of the online mobile retail market.”
An index released in June 2013 by payments company Adyen and a report released in January 2013 by Adobe also highlighted the growing importance of the tablet in mobile commerce. Adobe reported that 55% of tablet owners used their device to buy goods or services in 2012 and estimated that number will rise to 60% in 2013.
Like the Javelin study, the Adyen index concluded that the tablet’s larger screen offers a better shopping experience with more choices, which in turn leads to a greater probability of consumers making an online purchase.
For retailers large and small, the shift from PCs to tablets and smartphones among consumers magnifies the importance of having a mobile-friendly e-commerce website and a mobile marketing strategy.
Among the potential measures that retailers can incorporate: create apps that streamline how customers locate their businesses and/or make a purchase via mobile devices; and ensure that their businesses are included in the appropriate local directories and listings in order to boost search engine rankings for location-specific searches.
Such steps may help business owners and marketers tap into a growing segment of the retail industry. According to Adyen, almost 14% of purchases globally in April 2013 were mobile transactions, a 75% increase over June 2012.
“The report points to an overwhelming consumer appetite for transacting on mobile devices, in particular on tablets such as the iPad, and that merchants have been listening,” Roelant Prins, the company’s chief commerce officer, said in a statement.