Just a few years can feel like a century in today’s whirlwind society. Nowhere is this more evident than in the ever-evolving world of mobile credit card payments. It’s a trend that shows no signs of stopping anytime soon.
The figures are staggering. By 2016, the global credit card market had risen to a whopping $5.88 billion. Projections forecast that this number will skyrocket to $38.12 billion by 2021. This represents a compound growth rate (CAG) of 54 percent, making it very attractive for businesses of all sizes to jump on the bandwagon for mobile credit card readers and software.
The Reasons Behind the Growth
It is no accident that mobile technology is becoming so popular. In fact, three factors have converged to thrust these types of payments to the forefront.
- The costs are going down. Today’s mobile payment technology vendors are changing the game when it comes to fees. While traditional banks generally charge their customers a transaction cost of 2 to 3 percent combined with monthly or yearly fees and a long-term contract, mobile payment companies furnish more appealing terms. There are often no contracts involved, and businesses simply pay small access fees and a fee per transaction.
- Wider acceptance of mobile systems. The news about the affordability and popularity of mobile payments has spread far and wide throughout the business world. As a result, a steadily increasing number of merchants are adding this platform to their structures. Considering there are currently more than 12 billion credit and debit cards in circulation, this represents a great deal of potential sales.
- Younger generations are leading the way. Teenagers and 20- and 30-somethings wield great consumer power. They don’t just spend a great deal now; they are destined to shape the technology and buying habits for years to come. As the first to adopt new mobile technologies, they will drive the direction that mobile payments take. Already, millennials, the generation that reached adulthood after the turn of the century, control 30 percent of gross income as compared with other cohorts. By 2025, millennials and the generation that follows them will have 47 percent of all U.S. gross income. Because they will hold the wallets, they have a great deal of influence.
Trends are moving at such a rapid rate that even a decade can bring about amazing transformations in the way businesses sell their products and interact with their customers. While we cannot predict all of the details, one outcome seems clear: Mobile credit card payments are here to stay. What’s more, they represent an opportunity for growth for companies of all sizes.