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Apps are key drivers of mobile commerce and payments: Juniper Research

June 17, 2010

mcd-paymentsThe value of digital and physical goods that consumers buy via their mobile devices is set to reach $200 billion globally by 2012, according to Juniper Research.

Digital and physical goods bought via mobile will reach about $100 billion this year, per the same study. Digital goods include entertainment and tickets, while physical goods include groceries, gifts and books.

“We are forecasting significant growth in the mobile payments market, with gross merchandise sales doubling over the next two years to reach $200 billion globally,” said Howard Wilcox, senior analyst at Juniper, Hampshire, Britain.

“This growth will be reflected both in the increased frequency of transactions and also in the growth in numbers of people paying for goods with their mobile devices,” he said.

Mr. Wilcox said that nearly half of all mobile phone users worldwide will pay by mobile for digital and physical goods by 2014, representing growth of nearly a billion users compared to 2010.

The new study, “Mobile Payments for Digital and Physical Goods” found that the availability of secure, easy-to-use, payment applications and the growing realization of users that they can make ecommerce purchases by mobile will drive the market.

The report found that the purchase experience has been enhanced by improved mobile commerce transaction processes due to faster mobile networks, more powerful devices and more user friendly smartphone applications.

Amazon Payments, for example, has recently introduced payment-processing tools for mobile devices, enabling smartphone users to buy with one click.

“The mobile payments industry is a growth market,” Mr. Wilcox said. “Mobile payments can make life much easier for users – both convenience and security, and cements the position of the mobile as the multi functional device that many people depend increasingly on.

“With that, however, comes the need for comprehensive user support so that if transactions fail then users are advised what action to take,” he said.

However, it is important that retailers and merchants need communicate the cost of transactions clearly so that people are not discouraged from buying via mobile.

The frequency of physical goods purchased will be higher than average in developed regions such as North America and Western Europe, the study finds. 

Retailers have a significant opportunity to increase their revenues through highly targeted marketing campaigns, using apps and mobile Web payments as a convenience play for users,” Mr. Wilcox said. “There will be business model issues to be addressed however by both financial institutions and mobile operators.”

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Giselle Tsirulnik is senior editor at Mobile Commerce Daily and Mobile Marketer. Reach her at

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