A combination of in-app purchases and Web site 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.
This is according to market analyst firm Juniper Research's report: Mobile & Online Remote Payments for Digital & Physical Goods: Opportunities & Forecasts 2016-2021.
The study found 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.
Juniper Research says US retail company 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 adds.
"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."
Bloomberg Business reports that mobile payment researcher Crone Consulting found that Apple Pay is the clear winner as far as active monthly users goes, the service has over 12 million people regularly using it each month. On the other hand, Android Pay matches Samsung Pay's 5 million monthly users, it adds.
Apple Pay is seen by many as an inflection point, and its development over the next three to five years has the potential to shape the payments industry for decades to come, says research firm Timetric.
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, says Juniper Research.
The research 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, notes Juniper Research.
These OS-Pay solutions are likely to pose a threat to PayPal's Western dominance, although Juniper does not anticipate that combined sales via Apple Pay and Android Pay will approach those via PayPal within the next five years at least.
Timetric says although Apple Pay marks a significant change in the payments industry, unless it expands its role in the industry, of which there is little current evidence, Apple's brand recognition will drive mobile payment acceptance as a whole, but will not disrupt the current state of the industry.
It adds transaction value on Apple Pay, Samsung Pay and Android Pay is still relatively small.
"For comparison, the value of Apple Pay transactions in 2015 was lower than the value of transactions on Kenyan M-Pesa," says Vladimir Vukicevic, lead analyst at Timetric's Cards and Payments Intelligence Centre.
Vukicevic says two Chinese payment solutions, Alipay and Tenpay, dominate the global mobile payments market in terms of value of transactions.
"PayPal is, however, the leader in mobile payments in markets outside China."
Growth in mobile payments depends on adoption by all industry participants, including consumers, merchants, card networks, issuers, acquirers, and smartphone developers, says Timetric.
The limited success of Google Wallet and Softcard in the US are key examples of how industry-wide cooperation is necessary for the smooth deployment of mobile payments, it adds.
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