Mobile payments gaining acceptance in developed markets
Over half of consumers to use smartphones or wearables for payments by 2018, says Gartner
Half of consumers in mature markets are expected to use smartphones or wearables for mobile payments by 2018, according to the latest predictions from Gartner.
The research house said that, in mature markets such as North America, Japan, and some countries in Western Europe, mobile payments are gaining acceptance. Gartner added that this is just one of many innovations impacting customer preferences in the personal technologies market.
"Innovation in apps, mobile devices and mobile services are impacting traditional business models, particularly in the way people use personal technology for productivity and pleasure," said Amanda Sabia, principal research analyst at Gartner.
"Product managers must understand who their customers are for these new devices and services, and how the products are being used. Knowing your customer is imperative in order to capture a fair share of spending opportunities in this dynamic marketplace."
When it comes to mobile payments, there are three types of mobile payments or mobile wallets available now: smartphone or wearables-based payments, branded mobile wallets from banks or credit card providers, and branded mobile wallets from retailers such as Starbucks.
However, mobile payments using Near Field Communication (NFC) technology (Apple Pay, Samsung Pay and Android Pay) will be limited in the short to mid-term due to a lack of partnerships between retailers and financial organisations, as well as consumers seeing little value in such payments, Gartner said.
"Any mobile payment wallets that are tied to the device will have limited adoption and only if the device has a huge installed base," said Annette Jump, research director at Gartner.
"Instead, cloud-based solutions will have a better chance to succeed as they can reach a wider audience and can support many use cases beyond face-to-face or in-store options. Also, mobile payment and mobile wallet adoption requires a country-by-country rollout plan with an enabled payment infrastructure and agreement with major banks and retailers."
Gartner also predicted that, by 2018, 75% of TV-style content is expected to be watched through application-based services in mature markets.
"The increasing prevalence of application-based TV-style viewing will be disruptive to the traditional pay-TV market. Consumers are already cutting back on premium pay-TV channels in favor of subscription video on demand (S-VOD) services such as Netflix and Hulu Plus," said Derek O'Donnell, senior research analyst at Gartner.
"We expect that this phenomenon will continue to accelerate over the next three years, putting pressure on the revenue of pay-TV operators, particularly from premium channel subscriptions."
Indeed, Gartner said that, as the mainstream market spends more time viewing TV through applications, more households will begin to "cut the cord" entirely, putting additional pressure on traditional pay-TV service providers. Pay-TV operators will need to provide application-based functionality for their content in order to remain competitive in an ever-increasing app-based TV-viewing culture, Gartner said.