Parks Associates this week predicted that 43 percent of U.S. smartphone owners will be using a “proximity mobile wallet” in one way or another by 2017, more than doubling the firm’s estimated usage in 2013. While NFC-based systems still struggle to get out of the gate, increasing usage of barcodes, the cloud, and Bluetooth will give mobile wallet apps a much-needed boost, according to Parks, helping developers and other players in the value chain figure out how to develop systems that bring value to both consumers and merchants.
While the mobile payments market has been the subject of ridiculous speculation for some time — eMarketer wasn’t the only firm that has slashed its forecast for the space — Parks’ modest estimate seems realistic. The problem is that short-term growth is likely to stem from a market with multiple competing systems using different technologies, as Parks predicts. But as I’ve written before, the market isn’t likely to see explosive growth until it coalesces behind a single system or maybe two, preventing consumers from having to scroll through a variety of apps based on which merchant they want to buy from. So while competing technologies may help spur short-term growth, I think they will only slow uptake in the long term.