For many years, technologists, venture capitalists, journalists, and large companies have pined for the era when the mobile phone would become our wallet.
And yet, already five years into the smartphone era, mobile payments are not mainstream.
In recent coverage, BI Intelligence lays out the main kinds of mobile payment solutions that currently matter, sizes the market, analyses global adoption trends on the merchant and consumer-side and discusses the key problems that any mobile payment solution must solve to break into the mainstream. It also maps out potential winners and losers in the mobile payments race.
Here are the four kinds of mobile payment solutions that currently matter:
- Carrier billing: Where the consumer pays by text message and the charge is added to their phone bill. This is great for a variety of specific use cases (reaching the unbanked, especially teenagers; ecommerce and gaming), but is crimped by carrier fees and control.
- Near-Field Communications (NFC): Where the consumer can pay at the point of sale by waving his phone in front of a terminal. NFC has been overhyped: it’s not more convenient than cash or credit, and the many companies who want a piece of NFC are cancelling each other’s efforts out.
- Apps: Where the consumer uses an app on his smartphone to pay, typically by scanning a barcode at the register. This is especially useful for specific companies and retailers to offer, as it allows them to offer loyalty rewards and discounts on top of payments.
- Card readers: Pioneered by startup Square, with recent entries from eBay (PayPal), Intuit, and Verifone, these solutions allow merchants to take payments by plugging a card reader into a smartphone or tablet. They’re very convenient (swiping a credit card is already ingrained consumer behaviour) and piggyback on the existing credit card network. Card reader companies can offer value-added services on top of the payments experience to spur adoption by merchants and consumers.
In full, our special coverage of mobile payments:
- Outlines the main strategic issues in the market.
- Analyses the four kind of solutions that currently matter — card readers and apps, carrier billing, and near-field communications — and their prospects for success.
- Show why merchant-side adoption will drive the market, and shows how big it will get
- Explains differences in global adoption trends
- Map out the winners and losers