The mobile payment industry is expected to become a trillion dollar industry by the end of 2016, as predicted by several studies. However, the last few decades have only shown how innovations in the payment industry have struggled. The early 1990s saw the emergence of department stores issuing their own cards. Consumers could turn in these cards for royalty points. This system was aimed at improving business and customer satisfaction but has quietly died out in the face of increasing use of universally accepted credit cards and debit cards.
Many companies are looking at new kinds of payment mechanisms, which combine the use of third party apps, NFC and a few other components in the form of a smartphone. Despite these considerations, companies fail to realise that 75% of the world’s population still don’t use a smartphone, implying that all these efforts cannot bear fruit till most of the world has access to a connected mobile devices.
So why is there so much focus on a method of payment that only 25% (maximum) of the world’s population have access to? There is an existent fear that a little too much investment is being applied to cater to a rather sampled part of the population. Media coverage surrounding mobile payments are centred on companies like Paypal, Square and LevelUp which are striving to create new ways to transact with the use of NFC services and mobile apps.
One has to applaud the efforts being taken by big companies in order to promote mobile payment platforms. Several different platforms have emerged to cater to the demand for mobile payments – in-store transactions, online payments, carrier billing transactions and the use of specialized applications and services like NFC, bank applications and swipe accessories. However, it is important to understand that a vast majority of the world’s population is still waking up to credit cards and debit card payments.
So where does the answer lie? Will the mobile payment industry take off or not? The answer is yes, even though critics say otherwise. Populations in developing countries are increasingly adopting entry level smartphones, which has increased interest in mobile payments. In fact, many national level banks and credit services in developing countries like India and China have their own Android and Symbian (Symbian is still a major platform in China and India) applications to facilitate mobile payments.
Analysts say that mobile payments will take off at a global level only when mobile payment technology like NFC and secure payment protocols are implemented at a standardized global level. Looking at the pace at which smartphones are being snapped up all across the world, this doesn’t seem like a very distant possibility.