Mobile payments are set to explode over the next few years, according to new research released today from Forrester.
According to the report, U.S. mobile payments will reach $90 billion by 2017, a 48 percent compound annual growth rate (CAGR) from the $12.8 billion spent in 2012.
Denée Carrington, the author of the report, says adoption will be fueled by unprecedented growth in proximity payments.
"Mobile proximity payments are currently the smallest category within mobile payments, but we expect it to be the fastest-growing," Carrington says. "Proximity payments will reach $41 billion, making up nearly half of all mobile payments in 2017."
Carrington says important drivers for growth will be lower barriers to adoption, increased convenience and early entrants striving for scale.
"Consumers adopt mobile payments when it’s clearly better than the next best alternative," Carrington said, adding that mobile remote payments, or mCommerce, are currently 90 percent of the mobile payments category and will continue to grow because mCommerce offers a better alternative to shoppers in certain contexts.
As for the mobile wallet, there are still challenges ahead. Carrington says 2013 will mark the beginning of the end for some mobile payment solutions as competition heightens and expectations for economic outcomes rise.
"But those that deliver value, convenience, and a clearly better alternative for both merchants and consumers will thrive as mobile payment adoption accelerates," Carrington says.