Over the past decade, eRetail transactions have accelerated to the point whereby, in 2013, more than $1 trillion in physical goods were sold online. At the same time, contactless payments have emerged as a means by which both retailers and transport operators can see tangible benefits.
A global market study by Juniper Research has found that the annual combined transaction value of online, mobile and contactless payments will reach $4.7 trillion by 2019 -- that's up from just over $2.5 trillion this year.
The study findings uncovered that the largest net increase in spending would occur through remote physical goods purchases.
It also highlighted the dramatic surge in activity in emerging markets such as China, with the online retailer Alibaba accounting for 20 percent of all global B2C (business to consumer) and C2C (consumer to consumer) eRetail worldwide in 2013.
However, while there was organic growth in the overall transaction levels due to increased purchasing on tablets and mobile, a significant proportion of tablet usage represented migration from desktop activity.
According to the Juniper assessment, the combined transactions on mobile handsets and tablets would exceed those on desktops and laptops for the first time in 2014.
The study findings noted that there was accelerating migration from physical format (DVD, CD) to digital (online streaming, download) across all core content sectors.
These included a marked trend towards VOD (Video On Demand) from players such as Lovefilm and Netflix at the expense of DVD, with online VOD services in commercial deployment in most European markets.
Potential Upside Demand for Contactless Payments
Meanwhile, contactless activity will primarily be driven by card purchases rather than mobile phones, although growth of mobile transactions should be boosted by HCE (Host Card Emulation)-based NFC (Near Field Communications) services.
"While we are now seeing contactless transactions scaling up in markets such as Australia, Poland and the UK, almost all current consumer usage is via the card," said Dr Windsor Holden, research director at Juniper Research.
However, with banks increasingly attracted to an NFC model in which they have full control of the customer, then we may well see some high-profile deployments in the medium term.