Here’s the Mobile Payment Landscape

In 2012, Gartner expects mobile payment transaction value to pass $171.5 billion worldwide, and that the number of mobile payment users will reach 212.2 million. This represents a 61.9 percent increase in transaction value, and a 32.2 percent increase in user volume.

In May 2012, Google (NASDAQ:GOOG) released a study that said 36 percent of smartphone users made a purchase on their phones, and 62 percent of those shoppers make mobile purchases at least once a month. The implication isn’t just that companies need well-designed mobile storefronts, but that consumers are shifting toward mobile payment processing services to conduct brick-and-mortar transactions. The company offers Google Wallet, which uses near-field communication to store payment information in the cloud and allows users to simply tap their phone against a point of purchase to pay for things.

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Square issues mobile credit card readers that attach to smart devices, as well as tap-to-pay services, and recently reported that it is now processing $8 billion in transactions every year. Along with Apple (NASDAQ:AAPL), which pre-installs its Passbook mobile wallet application on the new iPhone 5, Square will be accepted at participating Starbucks (NASDAQ:SBUX) stores in the United States. Apple’s Passbook is also integrating with Dow Jones component American Express (NYSE:AXP).

Bank of America (NYSE:BAC) is testing mobile payment technology and has partnered with a start-up called Paydiant. The system does not require unique hardware for merchants.

PayPal (NASDAQ:EBAY) is already a well-known leader in the space, but competition is clearly ramping up. About this competition, PayPal VP of Retail and Prepaid Products Don Kingsborough said in an interview with Jeff Reeves at, “PayPal is fortunate enough to be uniquely positioned with a comprehensive offering that we aren’t seeing from the majority of players out there.”

Even Facebook (NASDAQ:FB) is working with mobile payment, partnering with a tech company called Bango. According to a statement, “Bango now provides Facebook mobile web carrier billing as part of an improved mobile payments flow. This enables Facebook’s mobile web users to easily purchase digital content without the use of premium SMS messages or the limitations of credit cards.”

On September 17, MasterCard (NYSE:MA) released a developer kit for its PayPass service. Brian Gendron of MasterCard’s Worldwise Communications team said on the company’s Cashless Conversions Blog, that “MasterCard is leading the way in providing the tools and services needed to support mobile payments including the payment application, user interface and provisioning of payment accounts onto their mobile phones.”

Big names, big tech, big market — with $171.5 billion in transaction value, a number that is only expected to grow, on the line, major players across the board want to be the first to develop a ubiquitous solution. The company to do it will be a leader in influencing purchasing behavior in a future where financial transactions are performed through mobile, cloud-based solutions.

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