For the last few years we have been asking whether 201x is the ‘year of mobile payments.’ Until last year, we basically said no. Last year, once we finally believed that Apple was on the point of actually launching something game changing, we changed our minds. Asking the same question now, at the beginning of 2015, our answer is absolutely yes. This is the year of mobile payments.
It is not just because Apple has played its hand, or at least has begun to do so. There are many start-ups, many innovations, and many partnerships and relationships to be revealed in the next few months.
In a market that Juniper Research believes will be worth $670 billion by 2017 (a figure they quietly increased dramatically sometime after 2011), 59 percent of online purchases will be done through ‘alternative payments.’ This, according to a recent study by WorldPay, means payments transacted by devices other than credit or debit cards.
The truth is that, among the swirl of small companies inventing ever easier and cooler ways of making the payments experience better, Apple has a gravity that can pull entire industries one way or another. Their decision to work with banks (there was news over the New Year that UK banks are planning to launch something with Apple in the first half of this year) will surely produce a gravity well into which will fall all but the strong.
Huge as Apple is, there are, of course, other strong players.
Telecom operators themselves are not exactly small fry, and will not take kindly to being left out of the Apple pie. Direct Operator Billing (DOB) will become more of a focus, particularly now we are convinced that in-app DOB is the easiest way of paying for goods online.
Google, the other great attractor, is already pushing DOB, particularly among emerging economies, where they believe huge new business is available. Will they team up with telecoms operators to promote DOB? We are convinced that operators really do provide value (mainly through customer intelligence) to Over the Top (OTT) players. Perhaps competitive edge in payments will be what Google can provide operators. What they will want in exchange will remain to be seen.
Not to be outdone, last summer Amazon launched its Local Register, a Mobile Point of Sale system that allows smaller retailers an easy way of getting into the payments game. As an incentive, Amazon promises transaction fees will be deposited in customers’ accounts the same day.
Finally, of course, in the world of the Big Four digital players, all of whom can move industries, Facebook appointed David Marcus, founder of PayPal, last year. In one of the thinnest smoke screens ever seen, this was so he could apparently fiddle around with a money transfer service. We look forward to Facebook launching something serious in payments quite soon.
Given these great opposing currents and other disruptive whirlpools of activity, such as MCX, the payments arena will become even more interesting in the coming months.
2015 will indeed be the Year of Mobile Payments.