Mobile commerce continues to rise, as technology dominates what was once an in-store only retail sector.
According to a recent Juniper Research report titled “OS-Pay to Shake Up Remote Retail,” annual spending via Apple Pay and Android Pay is projected to reach $8 billion by 2018. That’s a $540 million increase from this year. The value of digital and physical products bought through OS-pay (or mobile payment) platforms will multiply by 15 times in the next two years, as a result of more in-app purchases and online retail payments.
E-commerce has increased greatly over the past decade. Today, consumers have access to many global markets at their fingertips and can buy goods instantly online. Last year, online purchases of physical goods totaled more than $1 trillion and digital goods sales generated another $700 billion.
Perhaps e-tail’s prosperity stems from changing consumer behaviors. One of the most studied shopper demographics is Generation Y, also known as millennials, that rely heavily on digital technologies to buy apparel and other goods. With this instantaneous mindset, millennials desire seamless purchase experiences and speedy transactions. Tying into OS-pay, the report discovered that Gen Y consumers use smartphones to discover and purchase products, not one or the other.
Another Juniper Research study, “Mobile & Online Remote Payments for Digital & Physical Goods: Opportunities & Forecasts 2016-2021,” found that OS-Pay purchases would address many online payment troubles, including Internet fraud. As developers are tweaking password entry issues, many consumers are already investing in OS-pay platforms, including Apple Pay and Android Pay, to purchase items. By 2021, 85 percent of remote items payments will be made through smartphones.
“It is clear that even in markets where PCs and laptops have a high installed base that the smartphone is playing an increasingly important role where remote goods purchases are concerned,” research author Steffen Sorrell said. “For merchants, this means that the buyer experience must be made as frictionless as possible—from product search and discovery to purchase.”
Currently, some OS-pay platforms offer payment options similar to PayPal. As mobile payment continues to drive e-commerce, it may pose a threat to PayPal with the establishment of a more seamless shopping experience. OS-pay platforms will also provide consumers with more payment options, some even omitting bank account and card details before purchases.