New findings from Juniper Research claim that the value of digital and physical goods purchased through mobile “OS-Pay” platforms will increase by fifteen times in the next two years.
A combination of in-app purchases and website retail payments is projected to drive annual spend via Apple Pay and Android Pay to $8 billion in 2018, up from $540 million this year, according to the research group. The new Juniper study found that the integration of OS-Pay into apps will prove to be a “no brainer” for developers looking to reduce buyer friction, where password entry on smartphones remains cumbersome.
Staples, for example, has already reported that over 30% of its iOS app users make in-app purchases through Apple Pay. Meanwhile, despite the continued contraction of the consumer tablet market, more than 85% of remote goods payments are forecast to be made using mobile devices in 2021.
"It is clear that even in markets where PCs and laptops have a high installed base that the smartphone is playing an increasingly important role where remote goods purchases are concerned,” says research author Steffen Sorrell. "For merchants, this means that the buyer experience must be made as frictionless as possible - from product search and discovery to purchase."
Apple has recently signalled its intent to offer Apple Pay to online merchants by the end of 2016, offering a similar payment mechanism to PayPal. The research group anticipates that this move will be welcomed by most merchants as long as integration into their storefronts is made simple and rates are competitive.
Meanwhile, Juniper expects the entry of Android Pay into this space once further country expansion has been achieved. This will no doubt boost the market further in terms of merchants who may have been undecided where Apple Pay is concerned.
These OS-Pay solutions are likely to pose a threat to PayPal's Western dominance. However, Juniper doesn’t anticipate that combined sales via Apple Pay and Android Pay will approach those via PayPal within the next five years at least.