It's no secret that mobile payments are growing by leaps and bounds. It's not hyperbole to say that mobile payments are the future of financial transactions, especially in the consumer-to-business marketplace. Is that future happening sooner than you might think? It looks that way - if a new report from Forrester Research and PayPal has it nailed. (For related reading, see Mobile Money: Using Your Cell Phone To Transfer Funds.)

TUTORIAL: Credit Cards

Change is Coming Sooner Than You Think
First, know that mobile payments are already widely viewed as being "mainstream." A July 2011 study from KPMG notes that 72% of business executives say that such payments, on a large scale, are inevitable. Another 58% say that their companies already have a mobile payment system in place.

"We believe that exploding smartphone growth and a myriad of opportunities will grow mobile payments at a much faster rate than our respondents anticipate," said Gary Matuszak, KPMG global chair of the Technology, Communication and Entertainment practice, in a statement. "A wide variety of payments is ready for adoption, as several key players already provide or are rolling out mobile payments, and interest among consumers in utilizing mobile payments is growing, in line with the industry's readiness to deploy them."

That could be happening faster than even the most optimistic mobile payment advocate could have hoped. Recent data from the U.K. arm of Forrester Research, in partnership with PayPal, estimates that mobile payments will replace other forms of payment by 2016.

No Wallet? Use Your Smartphone Instead!
A PayPal article, entitled No Wallet Required, examined the British mobile payment marketplace and concluded that "digital money" will become the go-to payment method within the next four years.

"We'll see a huge change over the next few years in the way we shop and pay for things," says Carl Scheible, Managing Director of PayPal U.K. "By 2016, you'll be able to leave your wallet at home and use your mobile as the 21st century digital wallet. Our vision of money is to enable you to pay for something from wherever you are, whatever device you're on – a PC, mobile phone, tablet, games console [sic] and a whole lot more." (For more, check out 8 Low-Cost Ways To Transfer Money.)

Scheible adds that paper currency won't go away entirely, but will face a diminishing demand. "The lines between the online world and high street will soon disappear altogether," he says. "Children born today will become the U.K.'s first 'cashless generation.' It will be completely natural for them to pay by mobile."

PayPal should know. It already processed about $3.5 billion in mobile payments in the U.K. in 2011 alone – that's five times the amount that the online payment giant saw in 2010.

The Bottom Line
The report says that the trend is only growing stronger with each passing year. About 50% of all mobile or smartphone device users bought something via mobile payments in the three months leading up to the publishing date of the study.

That number will grow, the data shows, and will cement mobile payments as the payment of record for consumers not just in the U.K. but also in the U.S.(To learn more about this technology, see New Technology: Pay Without Your Wallet.)

Related Articles
  1. Budgeting

    Trunk Club Review: Is It Worth It?

    Take a close look at one of the best-known online clothing services in the country, and determine whether it's a good fit for your style and budget.
  2. Budgeting

    HelloFresh Review: Is It Worth It?

    Discover one of the world's most successful meal subscription services, and learn more about how the service operates and what it costs.
  3. Budgeting

    Beer of the Month Subscription Review: Is It Worth It?

    Learn how you can get access to some of the best craft beers produced in the world, delivered right to your front door every month.
  4. Budgeting

    Just the Right Book Review: Is It Worth It?

    Take an in-depth look at Just the Right Book, a subscription service that delivers personalized book selections based on your reading history and preferences.
  5. Entrepreneurship

    ‘Happy Birthday to You’ Belongs to Everyone Now

    A class action lawsuit over the copyright to the iconic American song “Happy Birthday to You” ends by placing the ubiquitous ditty in the public domain.
  6. Investing News

    Who Does Cheap Oil Benefit? See This Stock (DG)

    Cheap oil won't benefit most companies, but this retailer might buck that trend.
  7. Stock Analysis

    Best Stocks to Buy for Around $1 (NXTD, MBII)

    Watch for strong technical indicators and other positive information when considering the purchase of any stock trading in the $1 range.
  8. Budgeting

    The Honest Company Bundles Review: Are They Worth It?

    Learn more about The Honest Company and its bundle subscription services, which deliver discounted diapers, formula and other baby products to your doorstep.
  9. Budgeting

    Blue Apron Review: Is It Worth It?

    Read about one of the top meal-kit delivery services in the United States, and learn more about what it offers and how much it costs.
  10. Stock Analysis

    JCPenney's Path To Profitability (JCP)

    Learn about what J.C. Penney's management team has been doing to profitably grow its business as the company recovers from years of revenue declines.
RELATED FAQS
  1. How can you pay your Walmart credit card?

    Holders of Walmart credit cards can make payments on their balances due by mail, online or at Walmart and Sam's Club stores. ... Read Full Answer >>
  2. How does a cost-of-living adjustment (COLA) affect my salary?

    Some companies build salary adjustments into their compensation structures to offset the effects of inflation on their employees. ... Read Full Answer >>
  3. Is Apple Pay safe and free?

    Apple Pay is a mobile payment system created by Apple to reduce the number of times shoppers and buyers have to pay for goods ... Read Full Answer >>
  4. Can you use your Walmart credit card at Sam's Club?

    Consumers can use their Walmart credit cards to shop at Sam's Club. However, they cannot use their Walmart credit cards when ... Read Full Answer >>
  5. How can you cancel your Walmart credit card?

    Walmart offers two types of credit cards: the Walmart MasterCard and the Walmart credit card. How to Close Your Walmart Credit ... Read Full Answer >>
  6. Does the Walmart credit card have an annual fee?

    The Walmart credit card does not charge annual fees to its cardholders. It does, however, have other fees associated with ... Read Full Answer >>
Trading Center