Momentum is building in the US for in-store mobile payments as smartphone ecosystem leaders unveil enhanced mobile payment platforms. The battle for mobile payments primacy is driving intense competition through internal innovation and acquisitions.
US Mobile Payments: Primed for Growth
Apple and Google are staking out leadership positions but there is still room for Mobile Network Operators (MNOs) to participate and benefit while helping to drive mobile payment growth.
Although mobile payments have been possible for years, awareness and usage have been limited. Despite the efforts of mobile operators, technology vendors, financial institutions, and startups, only 16% of US consumers made in-store mobile payments between December 2013 and February 2014. However, the potential for mobile payments grew considerably with the launch of Apple Pay and other recent developments which has resulted in there now being four main mobile payment platforms in the marketplace: Apple Pay, Google Wallet, CurrentC and Samsung Pay.
History suggests that smartphone ecosystem leaders will extend their dominance to the mobile payment space through aggressive research and development, acquisitions, and marketing to encourage universal adoption of mobile payments. Growth will also be driven by retailers becoming increasingly NFC-equipped. Currently only 30% of US terminals support contactless payments, however this is expected to change as US credit card issuers and payment processors are pushing for compliance with global standards incorporating microchips. As new terminals with NFC capabilities enter service, Apple and Google's reach will extend rapidly and mobile payment usage will accelerate.
As their reach expands, mobile payment platforms will increasingly enable consumers to leave everything else at home. Imagine a day where NFC allows you to unlock and start your car. At lunch time, your smartphone uses a coupon voucher for a free sandwich as you make a mobile payment. On your way home from work, you receive a grocery list from your spouse and an integrated digital assistant routes you to the grocery store and through the aisles. This functionality will transform a pleasant mobile payment experience into a "must have" mobile ecosystem.
For more details on the players and developments within this emerging opportunity, download the full report below.