NFC TIMES Exclusive Insight – Recent research and forecasts have confirmed what industry observers already knew: Despite concerted efforts by the Pays wallets to gain widespread use of mobile payments in the U.S. at the physical point of sale, the large majority of mobile payments are conducted online, not by tapping NFC phones or wearables in stores.
We are seeing this disparity play out with the level of transaction volume from tokenized cards. One of the latest studies to measure this trend–by UK-based Juniper Research– found that revenue for companies that provision and manage tokens, including those certified by major payments networks like Visa, will top $40 billion by 2024.And more than three-quarters of that revenue, or $30 billion, will be from tokenized cards used for ecommerce and remote payments, rather than for contactless payments at the point of sale, said Juniper in announcing the research a few weeks ago. That does not include revenue the payments networks might earn themselves from tokenization, though they are not believed to be charging tokenization fees, at least not yet.
In addition, research by UK-based Deloitte, for its first-ever Connectivity and Mobile Trends Survey, which was released in December, showed that while 80% of U.S. consumers have used their phones for online “shopping-related activity,” only 27% of the consumers have used their smartphones for making in-store payments. And only 19% of survey respondents said they make mobile payments in physical stores on a monthly basis. The online shopping-related activity includes researching, checking prices and making online purchases.
