ABI: North American Mobile Commerce To Nearly Quadruple Next Year

Mobile commerce transactions in North America are expected to nearly quadruple by next year, hitting $2.09 billiion, according to an analysis by ABI Research which said the popularity of smartphones and mobile initiatives by Amazon and eBay will play a big part in the surge.

ABI Research Senior analyst Mark Beccue said North American mobile commerce totaled about $346 million last year and is expected to hit $577 million this year. "Then, you're going to get a big jump by year-end 2010, reaching $2.09 billion," Beccue said. The analyst pointed out that even if it doubles in size as predicted, mobile commerce will remain a drop in the bucket compared to all types of E-Commerce. He said E-Commerce in North America alone was a $204 billion industry last year.

Nevertheless, Beccue said companies that eschew mobile are making a mistake. "Amazon and eBay have been out there for some time. It's almost like if you're an E-Commerce merchant, there really is no reason not to do this," he said. "It's relatively cheap to create a mobile Web site and tie merchant accounts and everything to it. So, it becomes a matter of asking, `Why wouldn't you?'"

As part of his research into mobile commerce, Beccue took a look at near-field communication (NFC) and determined that, despite all the hype about NFC's capabilities, its impact on mobile commerce "will be minimal" for the foreseeable future. NFC has promise and potential, but mobile commerce using NFC-enabled devices has "not met early expectations," said Beccue.

In his report, Beccue asserts NFC's lack of growth is not a failure of the technology "but of unclear business models." The sticking points seem to surround compensation to the parties involved in an NFC-enabled transaction, be it the chip-makers, the wireless carriers, the transaction processors or the retailers.

"At the end of the day, there will be some carriers across the world that say, `If we can find a significant way to get these chips in here for a reasonable price, then I don't need a percentage," Beccue said. "I'm not in the middle of the transaction anyway." The only lure for carriers is that they make money off data plans needed to use NFC chips, he said.