Digital payments set to reach $4.7 trillion by 2019
A new report from research specialists Juniper shows that the annual transaction value of online, mobile and contactless payments is just over $2.5 trillion this year and is set to reach $4.7 trillion by 2019.
The largest increase in spend will occur through remote physical goods purchases, buying things online in other words. This is partly due to increased activity in emerging markets such as China, with the online retailer Alibaba accounting for 20 percent of global B2C (business to consumer) and C2C (consumer to consumer) online retailing worldwide in 2013.
Growth in overall transaction levels is also due to increased activity on mobiles and tablets. However, a significant proportion of tablet usage now represents migration from desktop activity. The report points out that combined transactions on mobile handsets and tablets would exceed those on desktops and laptops for the first time this year.
In the US purchases via tablets already account for 25 percent of physical goods transactions and this is forecast to rise to 63 percent by 2019, by which time tablets will account for 22 percent of online physical purchases worldwide.
Digital deliveries of entertainment content are playing a part too, with the report noting that migration from physical formats to downloads and streaming is accelerating. Digital music accounted for 39 percent of the music industry's revenue in 2013, up from 34 percent the previous year. These gains are partly offset by the continuing decline of the ringtone market.
The report also predicts that mobile transactions will become more driven by NFC technology, although at the moment contactless activity is mainly through card payments. The report's author Dr Windsor Holden says, "While we are now seeing contactless transactions scaling up in markets such as Australia, Poland and the UK, almost all current consumer usage is via the card. However, with banks increasingly attracted to an NFC model in which they have full control of the customer, then we may well see some high-profile deployments in the medium term".
Contactless payment levels are currently highest in the far east and China where contactless ticketing and proximity payments are already well established.
You can access a whitepaper giving more details of the full report on the Juniper website.
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