Pay-by-cellphone to Facilitate $36 Billion Consumer Spending
Mobile
phone based contactless payments will facilitate over $36
billion of worldwide consumer spending by 2011,
according to Strategy
Analytics.
By comparison, with more than 1.3 billion Visa cards worldwide and 64% of the global credit card payments market, Visa's annual worldwide sales volume is more than US$4 trillion.
Less than 5% of the world's cell phones will be embedded with the chips by 2007, according to ABI Research. That number for Near Field Communications (NFC)-enabled cellular phones is expected to reach 30% or 450 million units by 2011. Only about 50,000 payment terminals currently accept this type of payment.
Consumer attachment to existing payment methods, combined with concerns over the security of phone-based systems, as well as competition from alternative contactless devices like plastic cards and key fobs, will slow adoption, says Strategy Analytics.
Several independent grocery stores, florists and coffeehouses in Dallas, Boston and Chicago are preparing to roll out pay-by-cellphone programs through MobileLime, a Boston-based company that helps businesses distribute mobile loyalty rewards and alerts to customers. A family-owned Chevy Chase Supermarket is one of the first businesses in the Washington area to begin putting in place a pay-by-cellphone system. Using radio frequency identification (RFID) chips, customers will be able to store credit card and bank account numbers in their cellphones and charge their bill by swiping the phone across a sensor in the checkout line.
