Plastic cards are starting to lose their grip on the payments world. According to Juniper Research LLC, mobile phone users will reach over 612 million and generate more than $587 billion financial transactions in 2011, with mobile payments generating $22 billion of that amount.
The report, released in January 2008, found that mobile phones have extreme potential as financial services tools. "A combination of increased user demand and a desire from all sections of the ... ecosystem to deliver intelligent applications and services has created an atmosphere that is both creative and pragmatic," said Alan Good, the report's author.
An ABI Research study found that more than 419 million near field communication (NFC) chipsets will be shipped by 2012. It also stated that NFC mobile transactions are becoming more attractive to the public transportation arena.
In addition, according to a recent Aite Group LLC report, 2.5% of merchant locations in the United States will be contactless-enabled by 2014, steadily climbing from 0.5% in 2008.
However, Aite predicts cash will remain the dominant form of payment in the United States for at least the next six years. "This is attributable largely to merchant trepidation of interchange costs on low-value transactions," the report stated.
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