Mobile Payments Unriddled

To be the global intersection of Fintech industry experts and analysts – where connections are built to bring clarity to the world of mobile technology and payments

The Pays

Apple Pay. Google Pay.  Alipay. Wait, how do I pay?

With 48 million people over the age of 14 using mobile apps last year, mobile payments have brought much-needed innovation to a legacy payments industry traditionally controlled by uninspiring bank technology. The emergence of the “Pays” has forced merchants to take a deeper look into their payments strategy, often unearthing a larger need for an overhaul of both the online and in-store checkout experience.

EMV to Mobile

With the industry migration from magnetic stripe to EMV (e.g., chip cards) acceptance, merchants were required to purchase new payment hardware to avoid fees associated with the EMV liability shift.  Fortunately, but unbeknownst to many, that same payment hardware has enabled mobile NFC payments for hundreds of thousands of merchants across the United States. So, if acceptance at the point-of-sale isn’t the issue, then what is?

The Winners and Losers

Although the popular mobile payments providers like Apple Pay and Google Pay utilize NFC communication, many of the more popular mobile apps, such as the Starbucks app, use QR code based payments.  NFC, which is a standard payment type with upgraded hardware, is much easier to implement than QR code based payment methods. Where NFC will work “out of the box” in most instances, QR code payments generally require more costly integration work with the point-of-sale system and the backend provider.  If QR code acceptance presents a larger barrier to entry for mainstream adoption, then why are QR code based mobile payment option, such as the Starbucks app, Alipay and WeChat Pay, seeing significantly more success than the NFC based mobile payment options, like Apple Pay, Google Pay and Samsung Pay?

Beyond Payment

Although year-over-year growth in mobile adoption is promising, non-affiliated mobile payments (e.g., Apple Pay, Google Pay, etc.) still only account for less than 1% of all merchant transactions in the U.S.  Compare those numbers to China, where more than 90% of all transactions made by users in more than 10 different provincial regions were conducted through mobile devices. The delta? Value added services. Mobile apps like Alipay, WeChat Pay, and even successful merchant apps like Starbucks, have had a hyper-focus on providing value added services through their apps instead of focusing solely on conducting a payment.  Whether it’s the ability to earn redeemable points, order ahead, or pay your utility bills through a single app, successful mobile players have created an experience that gives power back to the consumer. The lagging mobile players in the U.S. need to focus on more than just payments processing. Ensuring a seamless consumer experience that emphasizes value added services works to ingrain mobile usage into a consumer’s everyday habits, creating a cultural shift towards mobile that is much larger than simply asking the question, “how do I pay?”

Make sure to sign up for MPC 2018 to hear more from Matt Donnelly! Like this blog? Also check out Starbucks Continue In Store Success Over ApplePay and Why China Leads The World In Mobile Payments.

Read more at freedompay.com

Follow us on social media for the latest updates in B2B!

Image

Latest

Fighting for Fair Healthcare Access Means Overcoming Certain Challenges
November 8, 2024

With healthcare costs continuing to climb, and the access to quality care remaining uneven, discussions on healthcare reform are quite an essential topic. Millions of Americans face high out-of-pocket costs and limited access to critical health services. According to a 2022 Gallup poll, nearly 40 percent of Americans have delayed medical care due to…

Read More
kraken machines
Superior, Wisconsin Company Launches KRAKEN Machines
November 7, 2024

Superior, WI—BARKO Hydraulics, a Superior, Wisconsin-based company focused on the production of heavy equipment for forestry and logging professionals since 1963, today announced the introduction of a new equipment brand targeting a variety of non-forestry industries, including general construction, scrap/recycling and disaster mitigation, including wildfire prevention and clean-up. President, Justin Rupar, expressed enthusiasm about the…

Read More
unified data
Breaking Down Silos with Unified Data: Enhancing IT-OT Collaboration and Workplace Security
November 7, 2024

As organizations navigate the complexities of hybrid work models, the integration of Information Technology (IT) and Operational Technology (OT) has become pivotal. Eptura’s 2024 Workplace Index Report highlights that businesses are increasingly investing in data analytics, integrated workplace solutions, and collaboration software to enhance operational efficiency and employee experience. This trend underscores the critical…

Read More
Cutting-edge tracking tech
Lamar IoT’s Cutting-Edge Tracking Tech Prevents Drugs & High-End Food Products from Perishing
November 7, 2024

As global supply chains grow more complex, the need for precise tracking and quality control is critical. Traditional tracking systems often fall short, merely pinpointing the location without monitoring essential conditions like temperature or humidity. But for industries moving sensitive items—like high-value medicines and perishable foods—real-time insights into the condition of goods are essential…

Read More