Consumer interest in mobile payments is high, but so far, very few consumers have actually used the technology. That is about to change, though, with adoption expected to triple in the next five years.

According to Forrester Research, U.S. consumers were on pace to make $52 billion in mobile payments in 2014. By the end of 2019, that amount is expected to reach $142 billion.

“As more transactions happen on mobile devices, mobile payments will naturally be a significant part of that,” says Sucharita Mulpuru, a mobile and e-commerce analyst at Forrester. 

Mulpuru also credits the “rapid growth” of m-commerce and Apple’s entry into the mobile payments market with its Apple Pay mobile wallet application as catalysts.

Consumer comfort levels with the technology are also growing, especially “for low-value transactions with vendors that they trust,” Mulpuru says. 

Of all the ways that consumers can use their smartphones to pay for things, in-person mobile payments—using smartphones to make payments at retail point-of-sale terminals—have the greatest growth potential. Forrester expects these kinds of transactions to grow from nearly $4 billion in 2014 to $34 billion in 2019, with an aggressive compound annual growth rate of 56 percent.

For even more widespread adoption to occur, high-velocity merchants, such as Walmart and Target, and convenience stores, drug stores, and quick-service restaurants, will be instrumental, according to the Forrester report.

That change is already starting to happen. Lucky, Save Mart, and FoodMaxx in mid-January started accepting Apple Pay in their 217 convenience stores in northern California and Nevada. Save Mart stores also started accepting Google Wallet, Softcard, and several other smartphone digital payment methods.

Nicole Piccinini Pesco, copresident and chief strategy and branding officer at Save Mart Supermarkets, which owns and operates Lucky and FoodMaxx, said the move to accept Apple Pay is designed to help speed customers through the checkout line. “Accepting Apple Pay provides shoppers a secure and private way to pay for their groceries, and we’ve added support for this new mobile payment method solely for their benefit and convenience,” she said in a statement.

Retailers can also increase adoption by tying coupons and loyalty programs to their mobile payment platforms, according to Gilles Ubaghs, senior analyst for financial services technology at Ovum. 

Forrester also sees substantial growth potential for remote mobile payments—when consumers use credit, debit, or gift cards to pay for online purchases made via mobile commerce sites. This segment of the market should increase from $43 billion in 2014 to $91 billion by 2019, according to Forrester.

Also expected to see growth is the mobile peer-to-peer payments market, which Forrester predicts will expand from $5 billion in 2014 to $17 billion in 2019. 

Forrester expects mobile bill paying to reach critical mass by 2017. Today, 9 percent of mobile subscribers, or 26 million people, use their smartphones to pay their bills. That number is expected to grow to 19 percent of mobile subscribers, or 54 million people, by 2019.

But with all that volume, Mulpuru and others are quick to point out that mobile payments still represent just a small drop in the ocean of total U.S. consumer spending. Forrester puts that total at about $16 trillion per year. 

Nonetheless, $142 billion is hard to ignore, and many merchants are understandably struggling to make sense of the market—and to make it worthwhile for themselves and their customers. Forrester recommends adopting what it calls the IDEA cycle, which is composed of the following four elements:

• I—Identify the mobile moments, including opportunities to improve the experience by making it more convenient and enjoyable. This also involves knowing the customer and identifying his needs and motivations.

• D—Design the mobile engagement so that the customers’ needs and motivations align with and support business goals.

• E—Engineer the processes, platforms, and people for mobile technologies.

• A—Analyze results, monitor performance, and optimize outcomes. This means ensuring that vendor performance and business metrics can be measured.

Outside of what any retailers might do, though, consumer interest alone could be enough to move the mobile payments market forward. In fact, 31 percent of consumers responding to a Timetric survey were anticipating an increase of up to 25 percent in payments through their mobile phones during the first half of 2015.  —Leonard Klie