A recent report by Mary Monahan, Javelin Strategies’ Executive Vice President and Research Director, Mobile, analyzes the U.S. mobile proximity payment market, covering payments made by consumers using a mobile device at a merchant’s physical location. Three years of actual historical data and a five-year forecast are provided. By 2019, it is projected that mobile proximity payments will total $54 billion.
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Mobile and Online Payment Report
This report gives an overview of the mobile and online payment market.It provides the main figures for each market segment (in-store payment, carrier billing, remote online payment).
The latest market trends are analyzed, as well as the position and evolution of the main players (especially telcos and Internet players). [Read more…]
Cash-Based Alternative Online and Mobile Payment Services Around the World
Around the world, cash remains a significant consumer payment instrument, but as the 21st century shopping experience evolves, consumers who use cash exclusively or almost exclusively will be disadvantaged as goods and services increasingly move online.
In many countries, in response to the prevalence of cash for payments as well as to the low percentage of consumers with checking bank accounts and consumers’ concerns over the security of transmitting sensitive personal and financial details online, firms have stepped up to provide cash based alternative online and mobile payment services. These services enable consumers to pay with cash for purchases they can initiate online or with their mobile phones. [Read more…]
Report: Mobile Wallets in the US – Review and Analysis
A new report entitled Mobile Wallets: The U.S. Landscape by Mercator Advisory Group identifies U.S. mobile wallets by category and technology.
The physical wallet might someday go the way of the checkbook, used by few and no longer a necessity. Growing consumer use of smartphones is creating a market for mobile wallets capable of serving many of the same purposes physical wallets served for centuries but now are able to take advantage of a plethora of new functions made possible in an increasingly digital marketplace. [Read more…]
Research Report: Positioning for Payments in the New Mobile-Social Technology Era
We are at the beginning of a new technology cycle as consumer adoption of mobile and social media extends the reach of the web and integrates those media into the physical world.
Facebook is only eight years old, and yet its planned $5 billion IPO is the largest Internet IPO ever. As in every new technology cycle, network effects make room for new players and the creation—and destruction—of vast amounts of wealth.
The Gang of Four—Apple, Amazon, Facebook, and Google—is a group of network players entering the banking and payments environment. How will the strengths and weaknesses of the Gang of Four play against those of major financial institutions, payment networks, and wireless carriers? Surprisingly, PayPal rates on equal footing with the Gang of Four when it comes to innovation and emerges as a possible leader in the next tech cycle.
Research & Markets recently released a report entitled Positioning for Payments in the New Mobile-Social Technology Erathat focuses on the relationship of brands to consumer perceptions of trust, innovation, and privacy in order to identify opportunities and threats.
Primary Questions
- What is the newest technology cycle? Which brands are positioned to take advantage of the next cycle?
- What models are developing that will intersect with the financial services space?
- How will the strengths and weaknesses of the Gang of Four play against those of major financial institutions, payment networks, and wireless carriers?
- How well do consumers trust the Gang of Four compared with the major financial institution, payment network, and wireless carrier brands when it comes to their financial information?
- How do consumers rate the Gang of Four compared with the major financial institution, payment network and wireless carrier brands when it comes to protecting their private information?
- Which brands are viewed as most innovative?
- How do customers of the primary financial institutions rate their own institutions on the issues of trust, innovation, and privacy?
- How should brands position themselves to best compete in the new technology cycle?
Methodology
The report is based mainly on data collected online from a random-sample bank benchmark panel of 5,878 consumers in December 2011. The survey targeted respondents based on proportions of gender, ethnicity, age, and income representative of those of the overall U.S. online population. The margin of sampling error is ±1.28% at the 95% confidence level.
It is also based on a survey of 5,211 consumers conducted online in October 2011 on KnowledgePanel. This sample is representative of the U.S. census demographics distribution and is recruited from the Knowledge Networks panel. Data is weighted using 18+ U.S. Population Benchmarks for age, gender, race/ethnicity, education, census region, and metropolitan status from the September 2011 Current Population Survey (CPS) and household Internet access from the October 2010 CPS Supplement. The margin of sampling error is ±1.73% at the 95% confidence level.
Table of Contents
- Overview
- Methodology
- Executive Summary
- Platforms That Are Able to Gather the Biggest User Base Usually Gain the Most Power and Wealth in Each
- Technology Cycle
- Mobile + Social Defines the Newest Technology Cycle
- Wealth Is Created—and Destroyed—During Each New Technology Cycle
- Apple, Amazon, Google, and Facebook
- Platforms That Gather the Biggest User Base Usually Gain the Most Power and Wealth in Each Technology Cycle
- Mobile Platform
- Two Diverging Views of Mobile Success—Open (Google) vs Protected (Apple)
- Social Media Platform
- Mobile-Social Integration Opens Opportunity for Competitor to Move on Facebook
- Game-Changing Business Models Rapidly Emerge During Times of Technological Upheaval
- Tablets
- Alliances Can Use Mutual Strengths and Weaknesses Can Fill Gaps to Respond Faster and with Better Products
- Javelin TIP Model for Mobile Wallets
- Trust
- Apple Leads in Innovation—at Least for Now
- Innovation
- Privacy
- Don’t Count out the Financial Institution’s Primary Relationship with the Consumer
- No Brand Reaches the Gold Zone—Without an Alliance
- Appendix
- Related Research
- Companies Mentioned
– Amazon, American Express, Apple, AT&T, Bank of America, Chase, Citibank, Discover, Facebook, Google, MasterCard, Microsoft, PayPal, Research In Motion, Sprint, Twitter, U.S. Bank, Verizon, Visa, Wells Fargo, zvelo
More information: Research and Markets
U.S. Mobile Payment Market to Top $200 Billion by 2015, Says Research Report
A recent report from Aite Group forecasts that U.S. mobile bill payments will reach more than $200 billion in 2015.
Aite Group interviewed more than 60 companies in the Fall of 2010 and produced a 65 page report that defines and segments the mobile payment industry, and includes an analysis of the competitive and market trends.
Each one of the multiple categories of mobile payments defined in the report will experience double-digit growth, with mobile payments accounting for US$214 billion in gross dollar volume by 2015, up from US$16 billion in 2010–a 68% compounded annual growth rate (CAGR) between 2010 and 2015.
The report references the following companies: Allstate, Amazon, American Express, Apple, AT&T, Bango, Bank of America, Barclays, Bill2Mobile, BlackBerry, Bling Nation, BOKU, Brink’s, C-Sam, Cashedge, Cellfire, Chase, Chase Paymentech, Cimbal, ClairMail, coupons.com, Coupons Sherpa, Visa’s Cybersource, Device Fidelity, Diebold, Discover, Eagle Eye Solutions, eBay, Euronet, Facebook, First Data, FIS, Fiserv, Foursquare, Gemalto, Global Payments, Google, Gowalla, Green Dot, Groupon, Harland Financial Services, Heartland Payment Systems, Hipcricket, iLoop Mobile, Inside Contactless, Intuit, Jack Henry/iPay Technologies, Kubra, MasterCard, mFoundry, Mobile Coupons, Mocapay, MoneyGram, Monitise Group, mopay, MyWebGrocer, NCR, NetSpend, Nokia, Oberthur Technologies, Obopay, OfferIQ, Online Resources, PayPal, Plastyc, Pyxis Mobile, Research-in-Motion (RIM), Roam Data (Ingenico), Roamware, Rocketbuxx, SK C&C USA, Square, Starbucks, Sybase, T-Mobile, Tetherball, 3i Infotech, Tier Technologies, TransferTo, TSYS, Twitter, U.S. Bank, VeriFone, Verizon, Vesta, Visa, ViVOtech, Waspit, Way Systems, Western Union, Wincor Nixdorf, WirelessLoyalty, Xipwire, Yelp, and Zong.
More information: Aite Group Mobile Payment Report.
Source: Aite Group
Mobile Web Payments (WAP)
The consumer uses web pages displayed or additional applications downloaded and installed on the mobile phone to make a payment. It uses WAP (Wireless Application Protocol) as underlying technology and thus inherits all the advantages and disadvantages of WAP. However, using a familiar web payment model gives a number of proven benefits:
- Follow-on sales where the mobile web payment can lead back to a store or to other goods the consumer may like. These pages have a URL and can be bookmarked making it easy to re-visit or share with friends.
- High customer satisfaction from quick and predictable payments
- Ease of use from a familiar set of online payment pages
However, unless the mobile account is directly charged through a mobile network operator, the use of a credit/debit card or pre-registration at online payment solution such as PayPal is still required just as in a desktop environment.
Mobile web payment methods are now being mandated by a number of mobile network operators.
A number of different actual payment mechanisms can be used behind a consistent set of web pages.
Direct Operator Billing
A direct connection to the operator billing platform requires integration with the operator, but provides a number of benefits:
- Simplicity – the operators already have a billing relationship with the consumers, the payment will be added to their bill.
- Instantaneous payments giving the highest customer satisfaction
- Accurate responses showing success and reasons for failure (no money for example)
- Security to protect payment details and consumer identity
- Best conversion rates from a single click-to-buy and no need to enter any further payment details.
- Reduced customer support costs for merchants since customers will complain to the operator.
It has however a drawback, the payout rate will be much lower than with other payment providers. Examples from a popular provider :
- 92% with Paypal
- 84 to 86% with Credit Card
- 45 to 91.7% with Operator billing in the US, UK and different smaller european countries, but usually around 60%
- However, there is in the world one exception to this rule, in UK it might give more payout percentage for a merchant to bill through the Payforit system than with a credit card.
Credit Card
A simple mobile web payment system can also include a credit card payment flow allowing a consumer to enter their card details to make purchases. This process is familiar but any entry of details on a mobile phone is known to reduce the success rate (conversion) of payments.
In addition, if the payment vendor can automatically and securely identify customers then card details can be recalled for future purchases turning credit card payments into simple single click-to-buy giving higher conversion rates for additional purchases.
Online Wallets
Online companies like PayPal, Amazon Payments, mHITs and Google Checkout also have mobile options. Here is the process :
First Payment
- User registers, inputs his phone number, the provider sends him a SMS with a PIN
- User enters the received PIN, authenticating the number.
- User inputs his credit card info (or another payment method) if necessary. (Not necessary if account already existing) and validates payments
Subsequent payments :
- The user re enters his PIN to authentify
Requesting a PIN is known to lower the success rate (conversion) for payments. These systems can be integrated with directly or can be combined with operator and credit card payments through a unified mobile web payment platform.
Source: Wikipedia
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