The Danger Of Comparing Mobile Stats

Written by Evan Schuman
May 30th, 2012

You say potato, I say integrated mobile commerce infrastructure. Three reports released this week illustrate that however much confusion exists today about mobile commerce terminology, there’s always room for more. When you see mobile projections, think hard and ask a lot of questions before you paste the data into a PowerPoint. Let’s start with Tuesday (May 29): Two respected marketshare companies, Gartner and IHL, released reports about the mobile market.

Gartner said: “Worldwide mobile payment transaction values will surpass $171.5 billion in 2012, a 61.9 percent increase from 2011 values of $105.9 billion.” Within minutes, a statement from IHL said: “Mobile in all aspects of retail is now a $5.5 billion market worldwide.” Were these companies considering different countries, using different metrics? No, they were referencing two entirely different situations.

Gartner’s figures were its guess as to how many dollars worth of transactions consumers would initiate through their mobile phones. IHL was looking at how many dollars retailers would spend to enable those purchases, such as the cost of buying tablets for associates or upgrading POS to support NFC.

Drilling into the IHL stats, it looks like IHL is projecting about $1.3 billion in straight software, $639 million for SaaS/Cloud, $2.8 billion for hardware and about $822 million for services.

Another report on mobile this week came from Juniper Research on Wednesday (May 30), and it gets the retail reach award. Sayeth the report: “More than 1 in 4 of U.S. and Western European mobile phone users will use their NFC-enabled mobile phone to pay for goods in-store by 2017, compared with less than 2 percent in 2012.” But Juniper’s statement gave no indication of how that figure was created.

Is it shoppers answering a survey? In which case, what is the credibility of a consumer in 2012 predicting how he or she will pay for goods five years from now? Consumer surveys are hardly accurate in predicting what candidate they’ll vote for in two days.

Projecting how consumers will react to a payment method in five years is absurd. What other technologies will then be in place? What incentives will retailers be offering for alternative payments? In a half decade, will the “phone” even be recognizable as a phone using 2012 standards? Look at some of the predictions made in 2007 about what the 2012 mobile space would look like, and then let’s talk.

Projections are great, and they are necessary. But some things are going to be subject to so many unknowns that long-range projections are simply silly. Projecting what will ship in December based on manufacturing levels is fine. But when you start trying to project what consumers will do, that’s where credibility takes a hike.


Comments are closed.


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.