Mobile Payments are Growing - But Keep It in Perspective, Folks

Yesterday, Business Insider sent a Valentine to the mobile payments industry with the announcement of a new report.  The new report (I haven't seen it) covers the exciting stuff that's happening in payments from the mobile vector and, as we all know, that's a lot.  The press release put out some relevant numbers I thought were intriguing to examine.

Now, I'm a mobile transaction fan.  I just made my first Isis payment at my local pharmacy here in Massachusetts.  (No, Isis hasn't opened up here, I just had a SIM/UICC swapped out at the last Smart Card Alliance show in Salt Lake City.  And, yes, it worked.  More on that later as I gain more experience with it.)  

My wife's jaw dropped today when I deposited a check from one of her tutoring students using my smartphone.  

I've got Starbucks, Square Wallet, LevelUp, and more.

I like this stuff.  

But I'm something of an outlier.  It's my business.  And it's my business to be both encouraging and skeptical.

So, upon seeing the numbers reported in the BI report press release, it got me wondering about how big mobile really is when looked at  against the backdrop of all card payment volume.  So, using the press release's numbers and rounding them up to $25B and putting them against recent enough US credit and debit card volume of $2,158 trillion, we have, well, a start.

	Billions
PayPal mobile volume	14.0
Square volume	10.0
All other in-store mobile	.6
Total	24.6
rounded up to	25.0
All credit and debit card volume, 2011*	2,158
All mobile as percentage of all credit + debit cards	1.16%

* Nilson Report

Baby Steps

It's clear, we're still in mobile's infancy at 1.6%.  That's where we are today.  That number's diminutive stature would be almost laughable except for, at least, a few reasons:

1. These are the baby's first steps.  But, like the infant, all of the equipment's in place and it just needs practice and time to grow.  
2. Merchants are excited by what tablets can do with the right software.  And it's not just Square.  NCR's Silver iPad-based POS software is gaining attention.  There are dozens of others. Expect a LOT of Level 4 merchants (that's the small ones) to look seriously at this approach.
3. Consumers are, at least, intrigued by paying or handling coupons via their smartphones.  According to the report, there's 7.9 million of us who have used either NFC or QR code based mobile payments. That leaves 80 million and more to go.

Even if the mobile numbers are over or understated by 50%, the number is of sufficient size for everyone to acknowledge that mobile isn't just a fad and it isn't going away.  And it's still an infant.

Happy Valentine's Day, Kiddo!

(BTW, it might be pretty embarrassing for PayPal should Square's volume surpass it.  That's a race to watch!)