Research from Javelin confirms what we already suspected: retail purchases in physical stores are decreasing as e-commerce gains popularity – but mobile proximity payments are becoming more widespread.

E-commerce trends

Online/mobile sales now account for 10 per cent of retail spending overall. The trends driving up online sales include the 'buy online, pick up in store' model and the increasing use of mobile phones for making in-store purchases – mobile proximity pay – as well as the adoption of mobile wallets.

The report – 2017-2021 Retail Point of Sale Payment Forecast – looks at how changes in consumer shopping preferences have altered payment methods when they checkout at the POS or pay online. It evaluates payment trends in the physical POS channel until 2021 and looks at mobile proximity payments, cash, paper check, credit cards, debit cards, prepaid and gift card trends.

Mobile wallet market still open

Javelin Strategy & Research's Michael Moeser said: “Retailer-based mobile wallets will be an important driver in the growth of mobile proximity payments (mPOS) because they add a critical element to the mPOS value proposition that has been missing: retailer engagement. However, FIs need to selectively target a handful of retailer mobile payment apps in order to access growth in mobile proximity payments.”

The report shows that the market for mobile wallets is still quite open, with no one player dominating completely, although the most popular mobile wallet is Apple Pay, with just under 12 per cent of the market. Apple Pay is on a par with store-branded mobile wallets, while Android Pay and Samsung Pay are just behind with about 7.5 per cent and 6 per cent of the market respectively.