Fortune Favors Mobile Payments

by Tim Sloane 0

This Fortune Magazine article “Report: Contactless payments will grow by 100% in 2015” better be the bellwether mobile payments needs, since some of the numbers provided strike Mercator as a tad optimistic:

“Apple APPL 0.00% CEO Tim Cook has said that Apple Pay will be accepted by 1.5 million locations in the U.S. by the end of 2015. During Apple’s earnings call in January of this year, Cook revealed that Apple Pay made up two out of three dollars spent on purchases using contactless payments across the major credit card companies, including Visa, MasterCard, and American Express.
Juniper Research supports Cook’s data, and says that the number of mobile wallets using contactless technology is expected to reach 200 million by the end of 2016, up 100% from the end of 2014.”

Visa has indicated that as of July there are 295,000 EMV acceptance locations, only some of which will also be NFC enabled. As this is 48,000 more than recorded at the end of June, this growth rate suggest a maximum of 240,000 more locations by the end of the year, for a total of 535,000 EMV accepting locations – not all of which will have their NFC readers turned on. Note that this is not going to happen as many merchants intend to freeze their POS during the holidays, a shrewd decision. Even if we assumed that none of the 750,000 locations reported at the launch of Apple Pay were EMV compliant and therefore should not be counted as EMV (many were) and all of these numbers are additive, we would still be at just under 1.3 million NFC-enabled merchants. It will surprise Mercator if there are 1 million locations in the US accepting NFC payments in January 2016.

Overview by Tim Sloan, VP, Payments Innovation at Mercator Advisory Group

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