The state of mobile payments in 2015

Apple, Starbucks and Disney are all strong brands with loyal followings, but they also have something else in common: They’re early leaders in the ever-evolving mobile payments market.

Some analysts predict 2015 will be the first year all the pieces — including a larger base of NFC-enabled devices and terminals, and growing consumer acceptance — come together to take mobile currency mainstream. A number of additional companies are also entering the world of mobile payments, such as American Express, which you might expect to see, and Jawbone, which might seem surprising.

Here’s a high-level look at the current mobile-payment and wallet adoption levels, as well as a breakdown of

By the end of this year, 5 percent of the world’s 600 million to 650 million NFC-enabled phones will be used at least once every month to make “contactless in-store payments at retail outlets,” according to consulting firm Deloitte’s annual “Technology, Media & Telecommunications (TMT) Predictions” report.

While five percent is not a staggering number, it represents a considerable increase over last year’s mobile payment usage rate. As of mid 2014, less than 0.5 percent of the 450 million to 500 million NFC-enabled phone owners used their mobile devices for in-store purchases, Deloitte says.

While contactless mobile payments won’t go mainstream this year, “niche adoption” will continue to grow, according to the report. Down the road, mobile payments use via NFC-enabled devices should “rise steadily” as consumers become more familiar with the concept and banks and retailers readily accept mobile payments.

CurrentC is expected to be available in mid 2015, and it will combine mobile payments and loyalty benefits. Merchant Content Exchange (MCX), a company owned by a consortium of U.S. retailers including CVS, Best Buy, Lowe’s, Sears, Target, and Walmart, backs the CurrentC platform. 

Small-scale trials are currently underway in undisclosed U.S. markets, according to IDG News Service, but some critics express doubts about CurrentC. “MCX seems completely unaware of how people actually shop at its partner stores,” Forbes says. CurrentC doesn’t support credit cards, to help merchants avoid those fees. Instead, CurrentC uses debit cards, which don’t provide the same level of fraud protection as credit cards. The system will also initially use QR codes instead of NFC or another wireless technology.

“If you want to imagine how the world will look in just a few years … skip Silicon Valley and … (go) to Disney World,” according to Wired.

Disney World guests can wear a “MagicBand,” a waterproof, plastic wristband that contains a short-range RFID chip and a 2.4-GHz wireless transmitter. MagicBand is also a mobile payment system, and it lets guests at Disney resorts purchase food, beverages and merchandise, and gain admission to attractions.

“You don’t need to carry cash, because the MagicBand is linked to your credit card,” Wired says. “You don’t need to wait in long lines.”

Google Wallet, a mobile-payment and wallet system that uses NFC to enable payments between compatible devices and point-of-sale (PoS) readers, was released in 2011. However, the system failed to gain traction, partially because some wireless providers supported the then-rival Softcard payment system, previously (and unfortunately) known as Isis.

In February 2015, Google acquired Softcard, integrated it with Google Wallet and announced its Wallet app would be preinstalled on compatible devices from AT&T, T-Mobile and Verizon Wireless later this year. You can use Gmail attachments to send money from your Google Wallet, too, even if the recipient doesn’t use Gmail. Apple Pay’s success ironically ignited interest in Google Wallet, and today more stores accept NFC payments from both competitors.

Wired says Starbucks is “the master of mobile payments.” A Forbes headline says “Once Again, Starbucks Shows Google And Apple How To Do Mobile Payment.” So what’s the big deal?

The coffee chain says it nabbed as much as 90 percent of the $1.6 billion spent in U.S. stores via smartphone in 2013. CEO Howard Schultz says the company’s loyalty program drives mobile payments. Coffee drinkers purchase Starbucks cards, load them with funds from a credit card, then scan barcodes in the Starbucks app or iOS Passbook wallet to pay for food and drinks at its cafes. The more they buy, the more points they earn toward freebies.

Starbucks is also reportedly testing beverage delivery (via the Postmates service) as an extension of its mobile payment offering.