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US Mobile Payments Forecast, 2013 To 2017

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Key Takeaways:
Mobile payments adoption Will Be Fueled By Unprecedented Growth in proximity payments
US mobile payments are expected to reach $90 billion in 2017. In that time, proximity payments will grow from the smallest of three mobile payment categories to nearly half of all mobile payments and will reach $41 billion. Lower barriers to adoption, increased convenience, and early entrants striving for scale will be important drivers of growth.

Despite Growth in peer-To-peer payments, Mobile Remittances Will lag Behind Mobile remittances will exceed $4 billion over the next five years. Mobile peer-to-peer payments will make up more than 90% of the mobile remittance category but will be hampered by its economics. Future growth will be realized in cross-border remittances, which are ripe for disruption, and in the rapidly evolving area of
mobile bill pay.

Consumers adopt Mobile payments When it’s clearly Better Than The next Best alternative
Mobile remote payments are currently 90% of the mobile payments category and will continue to grow. Th e growth of mobile proximity payments, mobile remittances, and mobile remote payments hinges this reality -- each must deliver a better, more convenient option to consumers than the next best payment alternative for a given purchase at a given time.

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US Mobile Payments Forecast, 2013 To 2017

  1. 1. Forrester research, inc., 60 acorn Park drive, Cambridge, ma 02140 usa tel: +1 617.613.6000 | Fax: +1 617.613.5000 | www.forrester.com US Mobile Payments Forecast, 2013 To 2017 by denee Carrington, January 16, 2013 For: Consumer Product strategy Professionals Key TaKeaWays Mobile payments adoption Will Be Fueled By Unprecedented Growth in proximity payments US mobile payments are expected to reach $90 billion in 2017. In that time, proximity payments will grow from the smallest of three mobile payment categories to nearly half of all mobile payments and will reach $41 billion. Lower barriers to adoption, increased convenience, and early entrants striving for scale will be important drivers of growth. despite Growth in peer-To-peer payments, Mobile Remittances Will lag Behind Mobile remittances will exceed $4 billion over the next five years. Mobile peer-to- peer payments will make up more than 90% of the mobile remittance category but will be hampered by its economics. Future growth will be realized in cross-border remittances, which are ripe for disruption, and in the rapidly evolving area of mobile bill pay. consumers adopt Mobile payments When it’s clearly Better Than The next Best alternative Mobile remote payments are currently 90% of the mobile payments category and will continue to grow. The growth of mobile proximity payments, mobile remittances, and mobile remote payments hinges this reality -- each must deliver a better, more convenient option to consumers than the next best payment alternative for a given purchase at a given time.
  2. 2. © 2013, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester® , Technographics® , Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com. For Consumer Product Strategy Professionals Why Read This Report Innovation and competitive disruption in mobile payments continued at an accelerated pace throughout 2012, but consumer adoption lagged behind the industry hype. Over the next five years, US consumers will adopt mobile payments at an accelerating rate, reaching $90 billion by the end of 2017. This report outlines the drivers of three distinct mobile payments categories and will serve as an essential tool for product strategists at companies that accept or facilitate payments as they prepare for the business impacts that broader trial and acceptance of mobile payments will bring. Table Of Contents Mobile Payments Growth Will Accelerate, Reaching $90 Billion By 2017 Proximity Payments Will Reach $41 Billion In 2017, With Growth Beginning In 2014 Peer-To-Peer Payments Dominate Mobile Remittances, With Bill Payment On The Rise Mobile Remote Payments Will Top $45 Billion, Reflecting Today’s Untapped Potential WHAT IT MEANS Adoption Occurs When Mobile Payments Offer A Better Alternative Supplemental Material Notes & Resources Data from the Forrester Research Mobile Payments Forecast, 2012 To 2017 (US) was used in this report. Related Research Documents US Mobile Retail Forecast, 2012 To 2017 January 16, 2013 The State of Retailing Online 2012: Investments In Mobile And Tablet Commerce September 25, 2012 NFC: What Lies Beyond Contactless Payments August 2, 2012 Why The Digital Wallet Wars Matter August 2, 2012 US Mobile Payments Forecast, 2013 To 2017 US Mobile Payments Will Reach $90 Billion By 2017 by Denee Carrington with Sarah Rotman Epps, Carlton A. Doty, Susan Huynh, Colin Campbell, and Andia Vokshi 2 8 9 January 16, 2013
  3. 3. For Consumer Product Strategy Professionals US Mobile Payments Forecast, 2013 To 2017 2 © 2013, Forrester Research, Inc. Reproduction Prohibited January 16, 2013 mobile payments growth will accelerate, reaching $90 billion by 2017 Mobile payments have caught the attention and imagination of industry insiders, venture capital investors, innovative new entrants, and the larger payments industry incumbents. To date, however, retailer investment and consumer participation have been nascent.1 But we see that changing: During the next five years, Forrester expects that mobile payments will move toward the mainstream. By the end of 2017, US mobile users will spend $90B via mobile payments, a 48% compound annual growth rate (CAGR) from the $12.8 billion spent in 2012 (see Figure 1). Forrester defines a mobile payment as: A transaction in which the transfer of funds is initiated using a mobile phone — excluding the “voice” function of the device.2 Forrester segments mobile payments into three categories: 1) mobile proximity payments; 2) mobile peer-to-peer (P2P) and remittances; and 3) mobile remote commerce, or mCommerce.3 In 2012, mCommerce represented more than 90% of the total mobile payments. While all three categories will realize healthy growth, mobile proximity payments will far outpace the growth of mCommerce and mobile P2P, resulting in a dramatic share shift. By the end of 2017, mCommerce will drop from 90% to 50% share, while proximity payments will jump from 4% to 45% share (see Figure 2). Figure 1 US Mobile Payments Are Expected To Grow To $90B By 2017 Source: Forrester Research, Inc.89161 Note: does not include purchases made on a tablet device Source: Forrester Research Mobile Payments Forecast, 2012 To 2017 (US) Mobile remote commerce Mobile proximity Mobile remittances 2012 20172016201520142013 (in millions) $709 $1,250 $1,787 $2,445 $3,253 $4,222 $549 $1,061 $3,782 $15,785 $27,659 $40,812 $11,579 $18,162 $25,001 $32,038 $38,653 $45,017
  4. 4. For Consumer Product Strategy Professionals US Mobile Payments Forecast, 2013 To 2017 3 © 2013, Forrester Research, Inc. Reproduction Prohibited January 16, 2013 Figure 2 A Dramatic Share Shift Will Occur As Mobile Proximity Payments Outpace mCommerce Source: Forrester Research, Inc.89161 Note: does not include purchases made on a tablet device Source: Forrester Research Mobile Payments Forecast, 2012 To 2017 (US) Mobile remote commerce Mobile proximity Mobile remittances 2012 20172016201520142013 Distribution of mobile payments spending by type 6% 6% 6% 5% 5% 5% 4% 5% 12% 31% 40% 45% 90% 89% 82% 64% 56% 50% Proximity Payments Will Reach $41 Billion In 2017, With Growth Beginning In 2014 Mobile proximity payments is currently the smallest of the three mobile payment categories, but we expect it to be the fastest-growing segment, increasing from $549 million in 2012 to $41 billion in 2017, an aggressive 137% CAGR. Although proximity payments will gain momentum each year, Forrester expects adoption to have the greatest acceleration in the 2014 to 2015 time frame. Why 2014? Because it will take time for proximity payment solutions to: ■ Reduce barriers to entry for early adopters. Historically, in-store contactless payments have suffered from the classic chicken-or-egg standoff, with merchants waiting for consumer adoption and vice versa, but we are headed toward a truce. 2013 will be a year of testing and learning. Product strategists will continue to refine their offerings to deliver meaningful benefits that outweigh the associated costs for early adopters (both merchants and consumers). There will be even more mobile payment options available, including offerings from payment industry incumbents such as banks, networks, and retailers. Early adopters will begin to trial one or more solutions with relatively low barriers to entry and challenge the products to deliver a better experience than simply swiping a card or paying cash.
  5. 5. For Consumer Product Strategy Professionals US Mobile Payments Forecast, 2013 To 2017 4 © 2013, Forrester Research, Inc. Reproduction Prohibited January 16, 2013 ■ Increase convenience and deliver clear consumer benefits. Very few consumers have actually made an in-store purchase using mobile proximity payments, but a growing number are open to doing so. In 2012, 36% of online consumers with mobile phones said they were open to using proximity payments (see Figure 3). We expect the fastest growth to be with lower-cost purchases and in contexts where mobile proximity payments offer greater efficiency and convenience over other methods of payments, such as: 1) an alternative to cash transactions such as vending, parking, transit, and smaller retail transactions; 2) in restaurants — quick service, fast casual, and casual dining — where customers frequently have to wait in line or wait at the table to pay; and 3) with tier-one retailers that have integrated access to coupons, offers, and rewards into the payment experience.4 ■ Demonstrate that early implementations can scale. As more merchants with scale (e.g., Starbucks), accept mobile payment solutions that are easy for consumers to adopt (e.g., Square), it will create momentum for broader acceptance of proximity payments among their peers and usage among consumers. Meanwhile, the merchant acceptance of Near Field Communications (NFC)-based proximity payments will begin ramping up. As a growing number of merchants seek to modernize their point-of-sale (POS) systems, many driven by the Europay, MasterCard, and Visa (EMV) acceptance mandate, NFC-based mobile payment acceptance will increase.5 In the 2012 Shop.org survey conducted by Forrester Research, 36% of IT executives surveyed reported that they already have implemented or have plans to implement in-store mobile payments such as Google Wallet by the end of 2013, and 42% reported that they already have implemented or have plans to implement PayPal (see Figure 4). Figure 3 Consumers Show Growing Interest In Mobile Proximity Payments, But Actual Use Is Low Source: Forrester Research, Inc.89161 Source: North American Technographics® Retail Online Survey, Q2 2012 (US) “How interested are you in paying for merchandise in a physical retailer store using your cell phone instead of cash or a debit/credit card (e.g., by tapping cell phone at the point of sale)?” (Responses on a scale of 1 [not interested] to 5 [very interested]) Base: 3,842 US online adults 18+ (online monthly or more) with mobile phones Already use this 2% 4 and 5 20% 3 14% 1 and 2 64% 36% of US consumers are open to in-store mobile payment.
  6. 6. For Consumer Product Strategy Professionals US Mobile Payments Forecast, 2013 To 2017 5 © 2013, Forrester Research, Inc. Reproduction Prohibited January 16, 2013 Figure 4 Proximity Payments Are Becoming A Priority For Many Retailers, But Acceptance Still Lags Source: Forrester Research, Inc.89161 “What priority do mobile payment systems have in your overall development list and budget this year?” “In your brick-and-mortar stores, what type of payments have you either already implemented or are considering implementing later this year?” Alternative (e.g., Google Wallet) 3% 11% 5% 3% 14% 65% PayPal 13% 5% 3% 8% 13% 58% Branded credit cards 71% 3%3% 24% Traditional bank credit cards 93% 2% 5% Already in all stores Implemented in some stores Will implement in 2012 No plans at this time Pilot phase Will implement in 2013 High priority 26% Medium priority 16% Low priority 26% Mobile payments are not on the development list or in the budget for 2012 33% Base: 43 retail IT executives (percentages may not total 100 because of rounding) Source: The State of Retailing Online 2012, a Shop.org research survey conducted by Forrester Research Peer-To-Peer Payments Dominate Mobile Remittances, With Bill Payment On The Rise In 2012, consumers spent $709M in mobile remittances.6 Ninety-eight percent of this spend was domestic P2P payments. Although far less hyped than proximity payments, consumer’s mobile P2P spend exceeded their mobile proximity spend in 2012. This pattern will repeat in 2013, but by 2014 proximity payment growth will far outpace mobile remittance growth. Over the next five years, mobile remittances will grow at a 43% CAGR to reach $4.2 billion in 2017. We attribute this relatively lackluster growth in mobile remittances to:
  7. 7. For Consumer Product Strategy Professionals US Mobile Payments Forecast, 2013 To 2017 6 © 2013, Forrester Research, Inc. Reproduction Prohibited January 16, 2013 ■ Lack of ROI in mobile P2P payments. Mobile P2P will approach $4 billion in 2017, but will exist mainly as pathway for engagement. Mobile P2P is one of the earliest forms of mobile payments. The use case for immediately sending money to another person instead of using cash, writing a check, or waiting to get online is easily relatable. Despite this, the tech archives are full of failed P2P solutions (even Yahoo had an online P2P service at one time).7 Mobile P2P providers (such as Dwolla, PayPal, and Venmo) that have had the greatest staying power rely on other sources of revenue to fund their consumer P2P service. Many banks have developed P2P services as a means to deepen customer engagement by consolidating their financial transactions. We expect to see few new competitors in this space, except those that, like Chirpify, use P2P as a pathway to engagement leading to larger commerce opportunities. ■ Underdeveloped cross-border mobile remittances. The US is the largest international remitter, yet outbound mobile remittance spend will continue to be a small fraction of the total market. In 2010, US consumers sent $51 billion internationally, a $2 billion year-over-year (YOY) increase despite a weak economy.8 Outbound mobile cross-border remittances were expected to reach only $14 million in 2012 and will reach only $290 million by 2017. Even with a stronger US economy, we expect new remittance regulations effective in 2013 to temporarily dampen short-term growth.9 A longer view shows that the international remittance market is ripe for disruption and that mobile will be a key element of growth. The options to send international remittances can be very expensive and inconvenient, typically requiring in-person transactions. Companies such as Xoom are solving for this by providing lower-cost and more-convenient alternatives where consumers can send money online or via mobile app. As mobile money services such as these expand and continue to offer secure and cost-effective international remittances options (especially in Latin America, India, and China, the geographies that receive the majority of US outbound remittances), consumers will flock to the convenience and access that mobile money transfer services can deliver. ■ Nascent mobile bill-pay capabilities. Forty-nine million consumers, or 17% of total mobile subscribers, will use mobile bill-pay services by 2017, up from 18 million users in 2012.10 Future growth is tied to bank and biller capabilities as they enable their online bill-pay services in the mobile channel. Vendors servicing both groups are answering the call. Recent product introductions include MiTek Systems’ Mobile Photo Bill Pay service for financial institutions and Online Resources Corporation (ORCC) Mobile Browser Bill Pay solution for billers. As biller capabilities improve and mobile banking features and usage increase, we’ll see greater adoption of mobile bill payment among consumers who value the anytime, anywhere convenience that mobile delivers.
  8. 8. For Consumer Product Strategy Professionals US Mobile Payments Forecast, 2013 To 2017 7 © 2013, Forrester Research, Inc. Reproduction Prohibited January 16, 2013 Mobile Remote Payments Will Top $45 Billion, Reflecting Today’s Untapped Potential mCommerce made up the vast majority of all mobile payments in 2012, reaching an estimated $12B, more than double the 2011 mCommerce spend. In the first half of 2012, only 12% of online mobile phone owners said they had used their mobile phones to purchase a product.11 We expect both the number of mobile shoppers and the average amount spent per shopper to increase, and these trends already began to bear out during the holiday 2012 shopping season. Forrester predicts that mCommerce will top $45 billion by 2017, growing at a 31% CAGR, making it the slowest growing — but still the largest — mobile payment category. As consumer trial and confidence in mobile shopping grow, we will see an increase in mobile shopping products and services that make the experience: ■ More convenient. One barrier to mobile shopping is the friction involved in the checkout and payment experience. It can be cumbersome on a mobile device and can impede purchase conversion, but there are a growing number of mobile payment solutions that intend to streamline this experience by providing autofill and quick checkout solutions. One such vendor is Payfone, which has a 1 Touch Checkout experience, similar to Amazon.com’s 1-Click checkout, and “securely transfers” the mobile shopper’s payment credentials from their bank to the merchant during checkout. ■ More secure. Sixty percent of online consumers who use mobile payments are concerned about their privacy and the safety and security of their transactions.12 This is a leading concern of merchants as well. As mobile payments of all types gain greater adoption, hackers and fraudsters are beginning to test the bounds of mobile payment products, mobile sites, and apps. To reassure and protect mobile shoppers, product strategists and mobile commerce providers are introducing more-robust user and device authentication methods and data encryption features. New ventures, such as Trustonic (formed by ARM, Gemalto, and Giesecke & Devrient, all leaders in secure technology) are emerging to create greater trust without increased friction. ■ More integrated. Today’s mobile consumers may bounce between options that include shopping online, on their mobile phones, and in-store. The larger mobile payment providers are working to ensure they can meet these consumers’ payment needs whenever and wherever they shop. Digital wallet providers such as MasterCard’s PayPass Wallet service, PayPal, and Visa’s V.me are targeting mobile and online shoppers to win trial and adoption of their digital wallets online, with the intention to transition that digital wallet use to in-person POS use of mobile proximity payments. Similarly, Google Wallet has now expanded beyond its initial focus on proximity payments to include eCommerce and mCommerce as well.
  9. 9. For Consumer Product Strategy Professionals US Mobile Payments Forecast, 2013 To 2017 8 © 2013, Forrester Research, Inc. Reproduction Prohibited January 16, 2013 W h at I t M e a n s adoption occurs when mobile Payments offer a better alternative Consumers are slow to adopt new methods of payment, even when they offer greater convenience. This has been true through the adoption of travelers’ and personal checks, plastic cards, and alternative online payments. Given the rapid adoption of new mobile technology by today’s consumers, product strategists may expect the rapid adoption of mobile payments as well. But consumers are not so easily seduced when it comes to payments. Forrester’s forecast reflects significant hurdles in the way of growth. Slow ramp-up of merchant acceptance is one of the hurdles, but not the only one. ■ Consumers adopt mobile payment when it is clearly better than the next best alternative. Mobile remote payments are part of the anytime, anywhere context of mobile, supported by improving mobile commerce experiences that together create a more convenient alternative to leaving one’s couch, waiting to get home or to work, or going into a store. As a result, we have seen much faster consumer adoption of mCommerce than of proximity payments. There is no question that lack of merchant acceptance of proximity payments continues to be a big hurdle, but it’s not the only one. In most cases, traditional payments for in-person purchases work so well that mobile proximity payments would lose a head-to-head battle (cash would be the notable exception, especially when exact change in required) because the benefit to the consumer simply hasn’t been clear. ■ Value-added services of coupons, loyalty, and e-receipts will be table stakes. Most proximity payments solutions will exist in the context of mobile digital wallets that include value-added services such as offers, coupons, loyalty, and e-receipts. Some will have more- robust, automated solutions that will appeal to many consumers. While these services will help create a reason for consumers to trial proximity payments and perhaps even to use them for specific shopping occasions, consumers will need more to motivate ongoing, sustained use and adoption. ■ Context will be the key to “killer apps” that achieve consumer preference. Variations in the purchase experience — whether it’s attended or unattended, involves a quick checkout or long lines, includes self-service or personalized service, or consists of impulse buys or more deliberate purchases — all can affect the consumer’s choice of how to complete the purchase most conveniently and move on. Further, knowing the best funding source for a given purchase will be attractive to some consumers (e.g., maximizing rewards, available balance, etc.). As consumers demand better, more-relevant mobile services, mobile payment product strategists must capture and integrate purchase context and insights about a consumer’s alternatives. Products with these “killer apps” that deliver a more convenient experience, enabling a consumer to make smarter use of time and money for that purchase, at that location, and at that moment, will achieve consumer preference and sustained use over time.
  10. 10. For Consumer Product Strategy Professionals US Mobile Payments Forecast, 2013 To 2017 9 © 2013, Forrester Research, Inc. Reproduction Prohibited January 16, 2013 Supplemental Material Methodology As part of the forecast modeling, Forrester develops comprehensive historical and base-year market size estimates based on a variety of sources, including public financial documents, executive interviews, Forrester’s proprietary primary consumer and executive research, and analysis of the Internet traffic database. All of Forrester’s forecasts are designed by a dedicated team of forecasting analysts who build the models, conduct extensive industry research, and manage the process of formally building consensus among Forrester’s analysts. Forecast analysts have backgrounds in investment banking, management consulting, and market research, where they developed extensive experience with industry and company forecasting. For more information on Forrester’s ForecastView offering, including access to additional details and metrics not included in this report, please contact us at data@forrester.com. Forrester conducted the North American Technographics® Retail Online Survey, Q2 2012 (US), an online survey fielded in April 2012 of 4,491 US individuals ages 18 to 88. For results based on a randomly chosen sample of this size (N = 4,491), there is 95% confidence that the results have a statistical precision of plus or minus 1.46% of what they would be if the entire population of US online individuals ages 18 and older had been surveyed. Forrester weighted the data by age, gender, income, broadband adoption, and region to demographically represent the adult US online population. The survey sample size, when weighted, was 4,358. (Note: Weighted sample sizes can be different from the actual number of respondents to account for individuals generally underrepresented in online panels.) Please note that this was an online survey. Respondents who participate in online surveys have in general more experience with the Internet and feel more comfortable transacting online. The data is weighted to be representative for the total online population on the weighting targets mentioned, but this sample bias may produce results that differ from Forrester’s offline benchmark survey. The sample was drawn from members of MarketTools’ online panel, and respondents were motivated by receiving points that could be redeemed for a reward. The sample provided by MarketTools is not a random sample. While individuals have been randomly sampled from MarketTools’ panel for this particular survey, they have previously chosen to take part in the MarketTools online panel. Shop.org and Forrester Research annually execute an annual study with online retailers regarding key metrics and areas of focus; this year’s study focused entirely on mobile commerce and mobile retail execution. Two surveys were fielded in the late spring and early summer of 2012 and targeted retail loss-prevention executives and retail CIOs.
  11. 11. For Consumer Product Strategy Professionals US Mobile Payments Forecast, 2013 To 2017 10 © 2013, Forrester Research, Inc. Reproduction Prohibited January 16, 2013 The Shop.org/Forrester mobile surveys resulted in 43 and 82 complete and partial responses from retail CIOs and loss prevention executives, respectively, across a variety of industries, including apparel, footwear, general merchandise, home furnishings, and personal care. Eighty-three percent of the retail CIOs were from multichannel retailers (more than 50% of sales are through stores), and 60% were from retailers with more than 200 stores. Ninety-one percent of the loss prevention executives were from multichannel retailers, and 71% were from retailers with more than 200 stores. Endnotes 1 Retailer investment in the mobile channel remains modest as companies struggle to value the ROI around mobile investments and cautiously navigate many difficult questions, such as unclear objectives, how many devices to bet on, whether to partner with third parties, whether to develop an app, how to integrate mobile into store operations, and how to value the impact of mobile on overall sales. For more information, see the September 25, 2012, “The State Of Retailing Online 2012: Investments In Mobile And Tablet Commerce” report. 2 This forecast covers US consumer mobile payments. It does not include purchases made on a tablet device or programmable NFC stickers attached to mobile handsets. Source: Forrester Research Mobile Payments Forecast, 2012 To 2017 (US). 3 Forrester defines mobile proximity payments as those initiated using a mobile handset at the retail point of sale in person, both attended (e.g., retail shops) and unattended (e.g., vending, parking, and transit). The forecast includes both hardware-enabled and non-hardware-enabled technologies, but excludes payments made through a programmable NFC sticker attached to a mobile handset. Forrester defines mobile remittances as domestic and cross-border person-to-person funds transfers initiated using the mobile handset, using either a preloaded application or a browser-based application to initiate, authenticate, and transfer funds. The forecast includes all transfers that originate from the US. The forecast excludes bank-to-bank fund transfers and donations made via mobile SMS to charities or campaigns. The forecast includes mobile bill payment users and user growth but not dollars transacted. Mobile bill payments are bill payments for utilities or credit cards that are authenticated through a mobile handset. Forrester defines mobile remote commerce, or mCommerce, as a transaction over a mobile handset where payment information is captured on the mobile phone for the purchase of products or services (i.e., retail products, travel, coupons/deals, and games). It does not include SMS commerce (e.g., donations), newspaper subscriptions, stock trades, and investments gambling. 4 Forrester measures a product’s convenience as the net result of the collective benefits less all of the products barriers. Convenience with proximity mobile payments can be delivered before the payment, during the payment, or after the payment and can enrich the consumer’s commerce experience.
  12. 12. For Consumer Product Strategy Professionals US Mobile Payments Forecast, 2013 To 2017 11 © 2013, Forrester Research, Inc. Reproduction Prohibited January 16, 2013 When it launched MasterCard PayPass — an NFC-based contactless mobile payment technology — in the UK for use on buses, MasterCard shared research showing that UK commuters waste an entire day every year due to queuing and other payment-related issues. They cite the fact that one in 10 passengers have missed a bus because they didn’t have correct change or were in line to buy a ticket. Source: “MasterCard Helps Bus Passengers Speed Up their Journey Times with Contactless Card Payments,” MasterCard press release, December 12, 2012 (http://newsroom.mastercard.com/press-releases/mastercard-helps-bus- passengers-speed-up-their-journey-times-with-contactless-card-payments/). 5 NFC deployment is underway, but widespread usage for payments is still two to three years away. Although NFC is coming, proximity mobile payments aren’t waiting, as there are alternatives to NFC that are driving growth. Consumer NFC handset enablement is underway and will continue with each new upgrade cycle (except for iOS handsets for now). For more information, see the August 2, 2012, “NFC: What Lies Beyond Contactless Payments” report. 6 The Forrester forecast for mobile remittances includes domestic and cross-border peer-to-peer payments that originate in the US. Although we consider mobile bill payments to be remittances as well, only transaction volumes (not dollar volumes) are included in this forecast. 7 In 2000, Yahoo purchased DotBank.com and launched a P2P service called PayDirect to support its online auction business. PayDirect was extended to mobile for several years as well, but despite launching within weeks of PayPal, PayDirect failed to scale and was ultimately shut down. 8 Source: “Migration And Remittances Factbook 2011,” The World Bank (http://siteresources.worldbank. org/INTLAC/Resources/Factbook2011-Ebook.pdf) and Tracy Alloway and Shahien Nasiripour, “US banks warn on money transfer rule,” The Financial Times, November 20, 2012 (http://www.ft.com/cms/ s/0/31f18600-1ecc-11e2-b906-00144feabdc0.html#axzz2FJ0domyW). 9 The Remittance Transfer Rule is an amendment to Regulation E, the Electronic Fund Transfer Act. It is set to take affect in February 2013 and is intended to create greater disclosure and transparency to consumers about the total cost of money transfer, including the fees, taxes, and exchange rates. The rule is mandated by the Consumer Financial Protection Bureau, formed as an outcome of the Dodd-Frank financial reforms. Source: “Remittance Transfer Rule (Amendment to Regulation E),” Consumer Financial Protection Bureau (http://www.consumerfinance.gov/regulations/final-remittance-rule-amendment-regulation-e/). 10 Source: Forrester Research Mobile Payments Forecast, 2012 To 2017 (US). 11 This data excludes consumers who purchase digital content such as apps and ring tones. Source: North American Technographics® Retail Online Survey, Q2 2012 (US). 12 Source: North American Technographics® Online Benchmark Survey (Part 2), Q3 2012 (US, Canada).
  13. 13. Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. Forrester works with professionals in 17 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 29 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit www.forrester.com. 89161 « Forrester Focuses On Consumer Product Strategy Professionals In addition to creating a differentiated portfolio of products and services, you must reinvent your business model to drive profitable growth, and turn market disruption into competitive advantage. Forrester’s subject-matter expertise and deep understanding of your role will help you create forward-thinking strategies; weigh opportunity against risk; justify decisions; and optimize your individual, team, and corporate performance. CHRISTOPHER POWELL, client persona representing Consumer Product Strategy Professionals About Forrester Global marketing and strategy leaders turn to Forrester to help them make the tough decisions necessary to capitalize on shifts in marketing, technology, and consumer behavior. We ensure your success by providing: n Data-driven insight to understand the impact of changing consumer behavior. n Forward-looking research and analysis to guide your decisions. n Objective advice on tools and technologies to connect you with customers. n Best practices for marketing and cross-channel strategy. for more information To find out how Forrester Research can help you be successful every day, please contact the office nearest you, or visit us at www.forrester.com. For a complete list of worldwide locations, visit www.forrester.com/about. Client support For information on hard-copy or electronic reprints, please contact Client Support at +1 866.367.7378, +1 617.613.5730, or clientsupport@forrester.com. We offer quantity discounts and special pricing for academic and nonprofit institutions.

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