NEW YORK (TheStreet) –– As digital wallets and mobile payments become more prevalent, thanks in large part to services such as Apple's (AAPL) - Get Apple Inc. (AAPL) Report Apple Pay, transactions on smartphones are expected to soar by 2017, hitting more than 2 billion transactions.
According to a report from Juniper Research, there are expected to be more than 2 billion transactions from mobile devices, including phones and tablets, by the end of 2017, an increase from 1.6 billion in 2014. The rise is due in large part to e-commerce purchases, as well as mobile banking needs such as money transfers. Much of that success may eventually come from Apple Pay, Apple's mobile payments service that was announced as part of the iPhone 6 and 6 Plus announcement in September.
Contactless payments, powered by NFC (near field communications) have been popular outside the U.S., mostly taking favor in Japan and South Korea. But with the advent of Apple Pay, NFC may pick up with retailers by making it easier for customers to pay for goods and services. Brands also may want to use social networks, such as Facebook (FB) - Get Facebook, Inc. Class A Report , to help better target their consumers.
"Brands and retailers should certainly seek to integrate their offerings with players such as Facebook and FourSquare," said Windsor Holden, author of the report. "Integration offers reach, allied to the potential to target specific user demographics."
Apple Pay is already seeing success, with CEO Timothy D. Cook recently noting that more than 1 million credit cards were activated with Apple Pay. Other NFC-based mobile wallets have failed to gain transaction, including Google (GOOGL) - Get Alphabet Inc. Class A Report Wallet, and CurrentC (backed by retailers including Walmart (WMT) - Get Walmart Inc. Report , CVS (CVS) - Get CVS Health Corporation Report and Rite-Aid (RAD) - Get Rite Aid Corporation Report ), currently in beta testing, is already seeing problems with security, having been hacked.
Holden's suggestion of having brands and retailers integrate social networks such as Facebook and Foursquare is interesting, as Facebook is working on integrating payments into its Messenger app, which recently surpassed 500 million monthly active users. Facebook CEO Mark Zuckerberg, however, cautioned payments wouldn't becoming anytime soon.
"So payments is an important part of the online business ecosystem, but we've traditionally thought about this as something that we're going to partner with other companies on to enable great solutions, rather than trying to compete and do it as a business ourselves," Zuckerberg said on Facebook's third-quarter earnings call. He noted that Facebook is likely to partner with someone on payments rather than go at it alone, noting that ads might be more beneficial than just doing payments, because payments is a fixed fee business, while ads have some "really good price discrimination."
-- Written by Chris Ciaccia in New York
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