In-app purchases and website retail payments are projected to drive annual spend via Apple Pay and Android Pay up to $8 billion in 2018, up from $540 million this year, Juniper Research reveals.
The company also projects that the value of digital and physical goods purchased through mobile ‘OS-Pay’ platforms will increase by fifteen times in the next two years.
Meanwhile, despite the continued contraction of the consumer tablet market, more than 85% of remote goods payments are forecast to be made using mobile devices in 2021.
The new study, “Mobile & Online Remote Payments for Digital & Physical Goods: Opportunities & Forecasts 2016-2021,” found that the integration of OS-Pay into apps will be standard for developers looking to reduce buyer friction, where password entry on smartphones remains cumbersome.
“It is clear that even in markets where PCs and laptops have a high installed base, the smartphone is playing an increasingly important role where remote goods purchases are concerned,” noted research author Steffen Sorrell. “For merchants, this means that the buyer experience must be made as frictionless as possible – from product search and discovery to purchase.”
Apple has recently signalled its intent to offer Apple Pay to online merchants by the end of 2016, offering a similar payment mechanism to PayPal. Juniper anticipates that this move will be welcomed by most merchants as long as integration into their storefronts is made simple and rates are competitive.
The research firm also expects the entry of Android Pay into this space as it expands to more countries. This will no doubt boost the market further in terms of merchants who may have been undecided where Apple Pay is concerned.
Juniper believes that these OS-Pay solutions are likely to pose a threat to PayPal’s Western dominance, although it said it does not anticipate that combined sales via Apple Pay and Android Pay will approach those via PayPal within the next five years at least.