Mobile Payment Magazine

Apple Pay Already Surpassing PayPal and Google Wallet

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apple-pay-logoWell, that didn’t take long! A new survey from 451 Research finds Apple Pay gaining momentum in the mobile payments space, surpassing both PayPal and Google Wallet.

“Our latest survey shows planned use of Apple Pay has been on an upward trajectory since it became available six months ago – with the service helping to spark consumer demand for mobile payment technologies,” said Andy Golub, Survey Research Director for 451 Research. “Although consumer perceptions of security remain an issue, the results point to marked improvements in this area.”
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The State of Mobile Payments: 2015

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To most Americans and Europeans, the mobile payments industry is just starting to get off the ground. With Facebook’s option to send money to friends via mobile, new offerings from Square Pay, and the recent release of iPhone 6 and Apple Pay, TechCrunch reports that 2015 seems like the “Year of Mobile Payments.” But the fact is that a lot of these options are way behind what’s happening in other parts of the world.

There’s a distinction between these “mobile wallets” which merely link a user’s credit or debit card to their mobile device, and mobile money, where your phone actually holds the value like a mini-bank. Mobile Money is proliferating in many parts of the world where access to traditional banking is not available to many, and it’s in these places in Africa, South America, Eastern Europe, where mobile money is really taking off, advancing far beyond what is available to people in Europe and North America.
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Wallet Wars: The Battle for Payments is Just Starting

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Starbucks created a lot of buzz about mobile payments when the company release it’s popular mobile payment app in 2011, and indeed Starbucks was on the vanguard of consumer retail mobile payments. And by most measures the Starbucks app should be considered a success. CEO Howard Schultz told investors during a recent earnings call: “Today in the U.S. alone over 13 million customers are actively using our mobile apps and we’re now averaging over 7 million mobile transactions in our stores each week, representing roughly 16% of total tender, more than any other bricks and mortar retailer in the marketplace.” That’s impressive.
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The Key Players in Mobile Payments in 2015

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As it becomes clear that mobile payments will dominate peer-to-peer money transfers and point-of-sale transactions in the future, the battle for mobile payment market share is heating up.

Competition is stiff in this emerging market, and for good reason. The chart below illustrates the growth that is expected from mobile payments over the next few years, which is nothing short of impressive.

There are several key players in the battle for our mobile payment transactions. Let’s take a look at each one. [Read more…]

35 Million Phones Sold in 2011 Can Make NFC Mobile Payments

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According to a new report by IMS Research, a leading independent supplier of market research and consultancy to the global electronics industry the number of Near Field Communications (NFC)-enabled phones shipped in 2011 totaled 35 million globally. IMS Research forecasts that significant market events and the enablement of other cellular handsets will drive that number to nearly 80 million by the end of 2012.

“After seven or so years of false dawns and frequent disappointment, 2011 has proved to be something of a breakthrough year,” says Don Tait, senior analyst at IMS Research. Most of the leading cellular handset manufacturers have launched NFC-enabled handsets over the last 12 months. They include Samsung, RIM, Nokia and HTC. Apple is the main player yet to release an NFC-enabled handset.”

As well as a stream of launches of NFC-enabled handsets in 2011, there have also been an increasing number of joint ventures and collaborations between different players of the NFC ecosystem. Significant examples include:

  • The launch of Google Wallet in the US
  • The French Government funding NFC in the following cities in France (Paris, Bordeaux, Caen, Lille, Marseille, Rennes, Strasbourg, Toulouse and Nice). Orange plans to sell 500,000 NFC-enabled cellular handsets in France by the end of 2011
  • Orange UK and Barclaycard’s “Quick Tap” contactless payment solution, which was launched in May 2011 in the UK. Retailers that have signed up to this service includes McDonald’s, EAT, Pret-a-Manger and Boots.

Looking forward to 2012, the market for NFC looks even more promising. Sales of NFC-enabled cellular handsets are projected to accelerate during the next twelve months to reach 80 million handsets. Additionally, showcase events such as the Summer Olympic Games in London will help to promote the technology and its benefits. For instance, NFC will be available at the Olympic Park, with Everything Everywhere, Telefonica UK, Visa Europe and Samsung involved in the project. The launch of the ISIS-initiative in Austin Texas and Salt Lake City in Utah in the first half of 2012 will also boost the profile of NFC.

Source: IMS Research

Google Wallet and the New Payment Ecosystem

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When the Google Wallet launched on September 20, 2011, the first test of a remarkable new financial ecosystem began. But despite the apparent success of traditional mobile payments products like M-PESA in Kenya and South Africa, Google and rival Isis have decided to rewrite the business model – and for good reason. Actually, four good reasons:

  1. Significant revenue is available from the advertising, retention and rewards programs, leaving the usual payments fees to the payments companies.
  2. The payments ecosystem cannot afford new categories. The-existing players are companies with considerable resources and the willingness to use their resources thwarting a new category of entrants.
  3. Regulatory changes are already pressuring known revenue streams, increasing the motivation for existing players in the payments ecosystem to protect position.
  4. Cash is resilient to other tender types in developed worlds, not so in developing countries.

As a result, both Isis and the Google Wallet products are creating a strategy which lets the payment ecosystem continue to charge and earn as much as possible from the payments business. The new revenue these companies seek to earn comes from two vulnerable industries: advertising and loyalty. Google, with its extreme interest in data collection and distribution, will likely seek new revenue from that channel also.

The strategies of these two companies, which are likely to be eventually joined by Apple and Amazon in their approach, has substantially slowed mobile commerce development in the rest of the developed world.

Even Japan, which has used an NFC-like technology for most of the last decade, is highly interested in understanding the results of the American experiments before committing to a long-term strategy. And they are not in a hurry. The only short-range communication standard with approval from the International Standards Organization is ISO/IEC 14443, known simply as Near- Field Communications or NFC.

To use either the Google Wallet or Isis product as they are currently understood, the customer will either need a phone with an NFC chip built in (which is in exactly one model out of hundreds of models of mobile phones in the United States—The Samsung Nexus S), and merchants will need to invest in NFC readers at their cash registers (also known as POS terminals).

Whether the US experiments succeed or fail, one thing is certain—the unenhanced peer-to-peer payments systems like M-PESA have no chance to reach the mainstream of the US or any developed country. The environment is simply too hostile from entrenched payments incumbents, and from feature-rich new services. A different breed of service that includes advertising and rewards programs as well as data services will vastly overshadow stand-alone mobile payments products. These new services are called “mobile commerce.”

The overriding conclusion is that the winning mobile commerce business model, inclusive of the mobile commerce players that will prevail in the long term, may be decided months or years before mobile commerce begins to penetrate the general transaction volume in developed markets.

More information: Google Wallet and the New Payment Ecosystem White Paper.

Source: Luciano Group

Merchants – How to Accept Google Wallet

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If you’re a small or medium-sized business, if you can’t already accept contactless payments today, you’ll need to upgrade your system, which is likely out of date with the latest technologies.

First data offers updated systems so you’ll be able to accept Google Wallet, other contactless payments, and of course traditional payment forms, with a single package.

If you already accept contactless payments, you’re ready for Google Wallet. [Read more…]

Google Wallet is Now Available!

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Google has announced the availability of Google Wallet for the Sprint Nexus S 4G:

“Google Wallet has been designed for an open commerce ecosystem. It will eventually hold many if not all of the cards you keep in your leather wallet today.”

“And because Google Wallet is a mobile app, it will be able to do more than a regular wallet ever could, like storing thousands of payment cards and Google Offers but without the bulk. Eventually your loyalty cards, gift cards, receipts, boarding passes, tickets, even your keys will be seamlessly synced to your Google Wallet. And every offer and loyalty point will be redeemed automatically with a single tap via NFC”

More information: Google Wallet.

Why Google Wallet Will Own the Mobile Payment Space

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Almost four months after Google first revealed its new mobile payments application, Google Wallet, the app is finally rolling out to the masses this week. Unfortunately, only a few smartphones – including the Samsung (SEO: 005930) Nexus S and Nexus S 4G – currently have the revolutionary chip built in. That’s why competitor services like PayPal, Square and the ISIS platform from Verizon, AT&T and T-Mobile are hoping to swoop in and corner the mobile payment market. And many experts are predicting that they could do just that. But they’re dead wrong!

I’m not convinced that any of these services can compare to what the Google Wallet platform has to offer. And here are three reasons why…
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Google Launches Mobile Wallet

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In May Google announced its mobile wallet, which uses NFC for tap and pay, in collaboration with Citi, MasterCard, Sprint and First Data.

According to a recent blog post, Google is releasing the first version of the app to Sprint, so Google Wallet will be available on Sprint Nexus S 4G phones.

With the app, customers can pay with a Citi MasterCard credit card and the Google Prepaid Card, which can be funded with any of credit cards.

Osama Bedier, Vice President of Payments wrote in a recent blog post that “Visa, Discover and American Express have made available their NFC specifications that could enable their cards to be added to future versions of Google Wallet.

Source: Official Google Blog