In addition to in-person payments, the other two categories of mobile payments will also grow by the end of 2019, but not as fast, Forrester said. Remote mobile payments, made over the Internet as an extension of e-commerce, will grow from $43 billion to $91 billion, while peer-to-peer mobile payments (sending money to another person via a mobile phone) will grow from $5 billion to $17 billion over the same period, Forrester said.
In a separate report, Carrington predicted Apple would push aggressively into the mobile payments market, but noted an area of weakness that could be exploited by Apple's competitors. "With Apple Pay, consumer data is not shared with the merchant," she noted. "This may impede a seamless data exchange between consumers and brands they trust to use their data to deliver greater value such as personalized service or better products or marketing."
Indeed, Apple has defended its privacy policies with Apple Pay, and has argued that consumers will put greater trust in Apple Pay because of that approach. Google has been criticized for not being clear over how the consumer data it gathered with its mobile payment app Wallet would be used. As a result, merchant acceptance wasn't good and Google Wallet, which was introduced more than three years ago, hasn't performed as expected.
In contrast to Apple Pay's approach of not sharing consumer data with merchants, Carrington noted, Starbucks has greatly benefited from its use of the Starbucks mobile prepaid card, which users load with cash from another source, such as a credit card.
The prepaid card is the only way to participate in the Starbucks loyalty program and is the only funding source that can be used in the Starbucks mobile app, which is read in stores via barcode scanners and not via near-field communication technology.
The Starbucks app automatically tracks spending and loyalty rewards earned and provides customer rewards redemptions (such as a free coffee on a user's birthday), automatic card reloads, music downloads and other offers.
"The mobile app enables Starbucks to capture richer customer insights and it benefits from the positive economics that accompany a closed-loop prepaid card," Carrington noted. "The Starbucks model of integrating loyalty and payments is one that many merchants aspire to successfully imitate."
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