We are officially living in a mobile-first world. Ever since the first iPhone came on the scene in 2007, smartphones have completely revolutionized the way we use the Internet and interact with each other. The smartphone has become so pervasive that it’s now our go-to technological device—today, more Google searches happen on mobile devices than on desktop computers.
With this mobile-first revolution has come a heightened interest in online shopping. Reports indicate that 30 percent of e-commerce in the U.S. is conducted on mobile devices. That number is even higher in other parts of the world, and it only continues to grow. It’s also worth noting that e-commerce currently makes up just over 8 percent of all U.S. retail sales, a number that increases by 16 percent each year.
So, whether you’re focusing solely on mobile or talking about e-commerce in general, it makes sense that the digital payments industry is such a hot topic these days. As more traditional forms of payment become increasingly obsolete in the coming months and years, it’s important to know where digital payments stand now, and where the industry is poised to head in the future.
With that in mind, here are four facts about the digital payments industry in 2016.
PayPal Still Reigns Supreme
Despite being a relatively early giant on the Internet scene, PayPal, founded in 1998, is still far and away the most popular digital wallet out there. According to Statista, PayPal’s annual payment volume is $66 billion, a number that has remarkably continued to grow over the years. Forbes’ digital payment influence metric rates PayPal as having a higher influence than all other digital payment players combined, showing it pays to get in on the action early and establish a foothold.
Cryptocurrency is On the Rise
The surging popularity of the sharing economy has put a heavy emphasis on digital payments, specifically peer-to-peer transactions. Such a model of business, especially when conducted digitally, often confounds more traditional methods of B2C transactions. Many are suggesting that cryptocurrency, such as Bitcoin, could be the answer. While some are still trying to wrap their heads around understanding Bitcoin and Blockchain technology, cryptocurrency is already establishing itself has a viable method of digital payment for the future. Projections indicate that Bitcoin transactions will exceed $92 billion in 2016, and many online shops, such as the Microsoft Store, are beginning to accept Bitcoin as a valid form of currency.
Shopping Will Be Streamlined in the Internet of Things
Whether it’s the growing popularity of wearable devices or the increasing innovation in smart home technology, all signs point to the Internet of Things becoming a commonplace, pervasive technology in the coming years, and with it will come a radical change in the way we shop. More and more wearables have payment support these days, with projections suggesting wearable transaction volume could hit $500 billion by 2020 and eliminate the need for a wallet in the process. And, with Apple’s recent announcement of its HomeKit for home automation—that is, running programs to connect smart home features such as lights and appliances to your smartphone or tablet—there’s a future on the horizon in which your Internet-connected refrigerator could link to your bank account and purchase more milk when you’re running low.
Payment Security is Still a Concern
Amazon revolutionized online payment with one-click shopping a number of years ago. Now that many shoppers make their purchases on their phones, mobile devices have adopted this practice too—all you have to do on many smartphones is leave a fingerprint on your home button to pay. With this ease of payment, however, has come a serious discussion about digital payment security. Statista reports that 25 percent of American users have concerns about mobile payment security specifically. Whether it’s two-factor authentication, developments in retina scanning technology, improvement in fingerprint scanning, or any other security measures, watch for major finance and technology (FinTech) players and startups alike to invest serious resources in ensuring digital shoppers’ security. The digital payment industry is projected to be worth $2 trillion by 2020, and you can bet that a good portion of that will be security-based companies and programs.
What other facts and projections have you heard about digital payments? Share with us in the comments below!
About the Author
Anthony Coggine has spent more than five years as a recruitment consultant in a variety of industries, primarily focused on his clients' Recruiting and Business processes, improving his clients' efficiency so they could be more profitable and poised for future growth.
Edited by Alicia Young
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