Last Friday, Forrester Research predicted that by 2016, mobile commerce would become a $31 billion industry, up from $6 billion in 2011. The report was a bit of a mixed bag—on the one hand, mobile commerce is growing in popularity, but on the other hand, that growth isn’t as substantial as researchers previously estimated, making up only a tiny percentage of retailers’ total Web sales. But now PayPal is coming out with some numbers of its own to show that not only are mobile payments growing in popularity, but that they are growing rapidly in popularity.
PayPal announced Thursday evening that it has doubled its projection for its 2011 mobile total payments volume (TPV) to $3 billion, which, if Forrester’s numbers are accurate, would mean that PayPal will account for half of all mobile payments for the year. But the real surprise is in how rapidly PayPal’s mobile total payments volume is increasing. This is the second time that PayPal has increased its estimate for its mobile total payments volume for 2011. Initially, the company projected that the 2011 TPV would reach $1.5 billion, and PayPal’s analyst day back in February, it increased that number to $2 billion.
“We’re thrilled by this news, and by other numbers we’ve seen climb in the past few months,” wrote Laura Chambers, Senior Director of PayPal mobile, in a blog post. “We’re now seeing up to $10 million in mobile TPV a day – a big increase from the $6 million we reported in March.”
Additionally, the company said that it now has eight million customers who are regularly making purchases on their mobile phones, up from PayPal’s previously reported six million.
It isn’t too surprising that PayPal would not only see such rapid growth in its mobile payments platform but that it would account for some half of all mobile payments made in 2011. A report released in May by GfK found that customers trust PayPal when making mobile payments over any other payment platform, including Visa and Mastercard, as well as brands like Nokia and Apple. And online merchants like Crutchfield Corp., a consumer electronics retailer and one of Internet Retailer’s Top 500 Online Retailers, reported seeing a 33.7% spike in conversion rates when it integrated PayPal’s Mobile Express Checkout.
In 2010, mobile payments accounted for $3 billion in retailers’ total Web sales, which Forrester estimates will double to $6 billion in 2011. But the research firm doesn’t believe this number will continue to double. After this year, Forrester believes sales will start to level out for a more modest growth trajectory, so in 2012, mobile commerce sales are predicted to generate some $10 billion in sales, and in 2013, sales will reach $14 billion, representing a compounded annual growth rate of 39%.
Image source: Mobilecommercialdaily.com