Step Aside, Big Tech: Here’s the Technology That Will Ignite This $1-Trillion Market
Thank you, Business Insider Intelligence (BI)! You just proved my point.
Within 24 hours of my article on Wednesday about the $1 trillion m-commerce market, BI released projections about why “mobile payments are poised for a takeoff.”
There’s just one problem, though: They’re ridiculously optimistic.
Based on BI’s estimates, the value of global mobile payments will blast 1,150% higher over the next five years.
That’s not a typo.
BI expects mobile payments to shoot from $120 billion in 2012 to $1.5 trillion by 2017.
The group predicts an even more incredible surge in the United States – jumping from $15 billion last year to $224 billion in 2017.
If you’re counting at home, that’s a 1,393% increase.
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In short, BI is convinced that 500 million global consumers “are primed to go wallet-free and begin paying for goods and services via their mobile devices.”
The only problem? They’re not.
Not unless security can be guaranteed.
As I told you on Wednesday, security is the major roadblock to unlocking the explosive potential of the $1-trillion mobile payment market.
But BI wants to us to believe otherwise. So who’s right?
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The Most Important Catalyst Behind Mobile Payment Adoption
I tend to agree with the Federal Reserve’s “Consumers and Mobile Financial Services 2013” report, which says that a hefty 38% of consumers won’t use mobile payment services at all because of security concerns.
So BI’s assertion that consumers are “primed to go wallet-free” is a bit of a stretch. Especially when you consider this key point from the Fed’s report:
In the past 12 months, just 6% of smartphone users made a point-of-sale payment with their phones.
Translation: Having a smartphone doesn’t automatically mean people will use it to buy something. When it comes to moving money on mobile devices, security remains the primary driver behind adoption, not convenience.
So that shoots down BI’s rosy mobile payment prediction, based on “the increasing smartphone penetration of major global economies.”
As the Fed report states (emphasis added), “Perceptions of limited usefulness and concerns about security continue to be the main impediments to the adoption of mobile financial services.”
That’s why “banks and mobile payment providers are scrambling to build – or buy – better defenses,” as Bloomberg BusinessWeek’s Olga Kharif wrote in October 2012.
Bottom line: Without transactions being 100% secure every time, consumers won’t embrace mobile payments. Period.
As a result, the “takeoff” for the market that BI boldly predicts absolutely will not happen.
I’m convinced that there’s only one way to solve this problem…
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David Crushes the Goliaths
As I mentioned on Wednesday, despite investing billions to set up the mobile payment infrastructure, a host of tech giants have failed miserably to lock it down.
Each year, thieves steal $190 billion by hacking into people’s phones and stealing their payment information.
You’d think that at least ONE of these companies would have invented technology powerful enough to stop criminals and give the $1-trillion mobile payment industry the launchpad it needs to succeed.
Nope. And, embarrassingly, one small company has beaten all the Goliaths to the punch.
It’s got the technology and patents to freeze criminals and light an inferno under the m-commerce market.
So it’s no surprise that the big boys want the technology badly.
They have absolutely no choice.
They MUST have it, in order to protect their massive investment and ensure that the mobile payment market really does take off.
I expect a major announcement from this small company in mid-August that will confirm the validation of its technology… its lucrative partnership with industry titans… and pave the way for it to become the go-to secure technology for the mobile payment market.
And the company’s shares will soar as a result.
You can grab all the details in my Validation Report.
Ahead of the tape,