People don’t like carrying wallets. The latest organization to announce this news is, unsurprisingly, mobile payments company PayPal. According to a global study it commissioned from Wakefield Research, 83 percent of respondents across five countries said they’d ditch their wallets if they could.
Further, even when they are lugging around those pesky wallets, people often don’t have cash on them. Canadians were found to be most often plagued by this problem, with 75 percent saying they often find themselves sans cash and unable to make a purchase. (Germans were the least likely to be without cash, and the most likely to have change on hand.)
PayPal, working to end such consumer “frustrations,” on May 21 announced plans to launch a Cash for Registers program next month. Businesses can trade in their registers for an iPad-based PayPal Here solution that will allow them to accept credit cards, debit cards, checks and PayPal payments. The system also wirelessly connects to a cash drawer and printer.
Through the end of the year, PalPal will waive transaction fees for any qualifying business that trades in a “dusty old cash register” for its modern end-to-end service.
“It’s not about replacing cash or your credit card with a new payment method,” said David Marcus, PayPal’s president. “It’s about using technology to solve real shopping pain points.”
Starbucks is one brand that’s well aware of the trend toward mobile payments. During the company’s last earnings call, CEO Howard Schultz said that the company’s mobile payment app has 10 million active users and accepts nearly 4 million transactions each week.
“Starbucks isn’t the most popular app for mobile payments. That accolade belongs to PayPal,” Yankee Group analyst Jason Armitage said in an April 30 blog post.
According to Yankee data, nearly 70 percent of people said they were interested in using a third-party mobile payment app, such as PayPal, Google Checkout or Obopay, and 21 percent said they’d used such software in the last three months.
“Will retailers stick to their own mobile wallets or join broader platforms?” asked Armitage. “The answer for big merchants is both. A broad mobile wallet can still win over retail partners, if it provides reach, value and visibility.”
From now through 2018, mobile payments will see the highest growth of any payment type, according to an April report from Javelin Strategy and Research. It expects mobile-proximity payments (in-store payments) to rise from last year’s $398 million to $5.4 billion in 2018.
Forrester analyst Denée Carrington has put that figure much higher. Carrington expects proximity payments, currently the smallest category, to be a major driver of mobile payments, reaching $41 billion by 2017 and making up nearly half of all mobile payments that year.
Further, she expects the total U.S. mobile payments market to reach $90 billion in 2017, a 48 percent compound annual growth rate from 2012’s $12.8 billion.
This year will be a pivotal one for mobile payment and digital wallet providers, Carrington wrote in a January blog post, following the National Retail Federation’s 102nd annual convention.
“Those that deliver value, convenience and a clearly better alternative for both merchants and consumers will thrive as mobile payment adoption accelerates,” she added.