Mobile Payments – Coming To A Phone Near You
If you’re remotely interested in mobile technology you’ll have come across articles that are either very much for, or very much against mobile wallets and/or mobile payments. Not just NFC, mind you, but all kinds – contactless, different kinds of billing, online, email – you name it.
The talk has been going on for years, the technology has been around for years, so why aren’t we all doing it? We’re all addicted to our mobile phones – we do everything on them, including checking our bank accounts, so why not payments? A myriad of apps, ticketing apps for example, have taken over our phone, we pay for things via SMS, we buy products and services via our mobile browser and as a result, we use the contents of our wallet less and less. The only thing we’re determined not to give up are our cards.
The most common reason people give for not wanting mobile payments is that there’s no real reason to stop using cash and cards. Why use something else when there’s no problem to begin with? Of course these arguments make sense, but there was nothing really wrong with horses either until Ford came into the picture.
While we are firm believers in mobile payments (it’s why the company was founded back in 1999), we know that there has to be more to it than just mobile payments. You have to give people a real reason to make the move from a physical wallet to a digital one, and there’s no better reason than literally (or should that be virtually?) moving their wallet to their phone; payments, loyalty cards, vouchers, ticketing, banking – everything, including all value added services, in one digital wallet.
“Our survey reveals that current users and non-users alike can be incentivized to use their smartphones to make mobile payments through rewards for usage or other value-added tools such as receipt tracking,” says Jim Bailey, managing director and head of Accenture Payment Services in North America. “As consumers expect their smartphones to improve and simplify their lives, financial institutions, merchants, mobile network operators and technology providers should consider incorporating new mobile payment applications to encourage broad adoption as quickly as possible.”
In fact, in the same study, more than half of those who currently make mobile payments said they were highly likely to pay by phone more often if they were offered coupons when buying by phone, reward points stored on their phone, coupons that could be stored on their phone, or preferential treatment, such as priority customer service.
Ovum principal analyst Eden Zoller says, “If people don’t think mobile payments are doing anything better or providing additional value then existing means, they’re not going to change their behavior and really when it comes to mobile payments we are asking people to change their buying behavior.”
An interesting point to add here is that nowhere have mobile payments taken off quite so successfully as Africa. From micro SMS payments to full mobile banking, Africa might very well be on the road to becoming the world’s first cashless society, leaping ahead of other countries in terms of technology and adoption.
It might well be because our buying behavior is more ingrained than that of many African countries, but sometimes we have to realize that technology can provide us with a new way of doing something that is so radically different from the current way, it feels wrong. Making the switch from cash to cards was certainly no quick thing. The first card issued was in 1946, but it wasn’t until the mid-70s that US Congress began to regulate the credit card industry.
Any expectations of an instant shift from one buying or purchasing behavior to another are unrealistic, but there are countless figures and facts that support the rise of mobile payments.
For example, smartphone sales have begun to outsell dumbphones. 56% of US citizens now own a smartphone and 60% of UK citizens, and as prices drop and more NFC enabled phones are produced and sold, the number of people capable of making mobile payments increases. Visa is predicting 52 million contactless payments per month by the end of this year – in Europe alone, and according to a recent report by Transparency Market Research, the global mobile wallet market is forecasted to reach $1,602.4 billion in five years. Juniper Research predicts that the total value of mobile payments will reach $670 billion by 2015 and $1.3 trillion annually by 2017, and within the next five years, less than a quarter of point-of-sale purchases will be made with paper money, according to Javelin Strategy & Research.
While those are ‘just’ predictions, there do exist some real life examples. Starbucks, for example, has proven to excel in mobile payments. In fact, over 10% of its US transactions are mobile payments. 10%! Not bad for a technology that no one sees the point of. It’s not just Starbucks either, Jamba Juice, Dunkin’ Donuts, M&S, Transport for London – the list goes on. Not forgetting countries – almost every week we see another place in the world where mobile payments are making waves – Hong Kong, the UK, Russia, Taiwan, Spain, Egypt…
Mobile payments won’t happen over night, but done right, they will have a profound impact on how we go about our daily lives. A recent survey showed that an average of 84% of people would like to be able to leave their wallet at home - mobile wallets must offer more than just payments. Then, we believe, people will begin to see the possibilities and benefits of mobile payments.
If you’d like to know more about our thoughts in regards to mobile payments and wallets, don’t hesitate to get in touch via the contact box on the left. We’re more than happy to share our knowledge.
For more information:
Online Communications Manager
+45 5045 2396