Mobile commerce is set to revolutionise the way that consumers engage with brands, but marketers don’t seem to be putting it to good use yet.
According to KPMG, mobile payments are set to reach £591bn by 2015 while Gartner predicts that 190m people will use their mobile to make payments in the next 24 months.
The potential for marketers is obvious, however in order to take advantage of this growing market they must first understand the full scope of what mobile payments entail.
PayPal has announced that its UK customers will now be able to use their smartphones to pay for goods on the high street.
The PayPal inStore app can be used at stores owned by the Aurora Fashions group, which include Coast, Oasis, Warehouse and Karen Millen.
Available on Android and iOS, the app gives PayPal a huge head start on its rivals in the mobile payment industry.
As previously reported, NFC is the technology that most people assume will eventually become the standard for mobile payments and Visa is planning a limited trial during the London Olympics.
Despite all of the well-documented challenges facing organizations that are trying to take advantage of the rapid rise of mobile, mobile presents what may be one of the greatest business opportunities for many companies.
It's not hard to understand why: there are estimated to be more than 5.5bn handsets in use globally today, making the mobile phone one of the most ubiquitous devices ever.
In developed and emerging nations, a growing number of those phones are smartphones that offer always-on access to the web.
Only 17% of UK consumers are ‘completely aware’ of what contactless mobile payments are, according to a survey by eDigitalResearch.
However, 67% of respondents have heard of the technology before, suggesting that more needs to be done to educate consumers about how NFC works.
This tallies with research published recently by VoucherCodes.co.uk which found that 55% of British consumers were unable to name a single mobile payment brand.
There’s been much excitement in the world of mobile payments around Square, a credit card reader that allows merchants to take payments using an iPad or iPhone.
More than 1m businesses have signed up to use the device in the US, but it still isn't available in the UK.
However, as of this morning UK retailers can apply to join the beta phase for iZettle, a mobile card reader backed by Carphone Warehouse founder Charles Dunstone.
It already has 50,000 users in the Nordic market since launching in its native Sweden last September, increasing the number of point of sales terminals on the region by 10%.
NFC smartphone payments are slowly making their way into the mainstream, but there is still a long way to go before we see widespread consumer adoption.
Visa plans to use the London Olympics as a showcase for mobile NFC, although the trial will only involve a limited number of athletes.
And the infrastructure for consumer adoption appears to be in place with more than 140,000 contactless terminals around the UK.
So what is holding smartphone payments back?
To find out more about NFC payments and the opportunity for retailers, I spoke to The Logic Group's marketing director Mark Kusionowicz.
Visa has confirmed that it will showcase mobile NFC payments at the London Olympics using Samsung’s new Galaxy S3.
Samsung even plans to create a limited edition handset for the occasion, but the bad news is that only athletes are being invited to take part in the trial.
The NFC payments are enabled using Visa payWave, an app that allows consumers to use their smartphone to pay for goods at the point of sale simply by touching it on a card reader.
Obama’s fundraising campaign has debuted a new SMS tool that allows supporters to make a donation simply by texting the number of dollars they want to contribute.
Last week a text message was sent to tens of thousands of previous donors asking them to again open their wallets.
According to Time, the message told supporters to “just reply with the amount you want to give and we’ll charge your saved credit card.”
Almost two-thirds of consumers would avoid making payments through their mobile using technologies such as NFC, according to research from VoucherCodes.co.uk.
The survey of 2,000 British adults found that 60% would avoid mobile payments altogether while 17% would be interested but would be worried about the technology working correctly.
Security concerns (36%) were the most common reason for avoiding mobile payments.
Mobile payment brands also appear to be making little headway in raising consumer awareness.
Square, the mobile payment upstart that's combined a credit card-reading dongle with the iPhone and iPad to take on established point-of-sale (POS) payment solutions providers, has been making frequent appearances in the news of late.
From attracting users like the Obama campaign and taxi drivers in New York City to overhauling its mobile app in an effort to drive consumers to local businesses, it appears that Square's $4bn-plus in annual payments processed could be just the tip of the iceberg.