Welcome to our new Payments Insights newsletter, a morning email with the top news and analysis on the digital payments industry, produced by BI Intelligence.
ONE-FIFTH OF U.S. SMARTPHONE OWNERS USED A MOBILE WALLET IN 2013. That comes out to 40 million Americans, according to Parks Associates. The market research firm forecasts that this number will grow 183% to 113 million, or 43% of smartphone owners, by 2017.
One factor that will likely drive growth is an explosion in payments technologies coming onto the market, which will have broader application beyond payments, including mobile loyalty programs and in-store marketing. These will give a greater number of smartphone users and merchants a reason to start using and accepting mobile wallets.
In the past, analysis of mobile wallet adoption has focused on apps that use the NFC communication frequency. But some of the most used wallet apps use barcodes/QR codes instead of NFC — like the phenomenally successful Starbucks app.
Unlike NFC wallets, merchants that accept payments from these other kinds of apps can often upgrade their existing point-of-sale hardware rather than purchasing expensive new hardware. The lower costs will convince more merchants to adopt mobile payment technology, and this in turn will also make mobile wallets more attractive for consumers — because they’ll actually be able to use them to pay.
New technologies like Bluetooth LE also have the potential to drive mobile wallet adoption by improving the consumer and merchant experience. As we covered in a recent report, Bluetooth LE has a greater range than NFC wallets and can be used for hands-free payments and in-store marketing. (Parks Associates)
MOBILE PAYMENTS IN CHINA FACE ROADBLOCKS: Consumer indifference, lack of mobile point-of-sales, and financial institutions’ security concerns are holding back mobile payments in China. Mobile commerce platforms that allow users to order products online and pay in cash when they pick them up from bricks-and-mortar stores are likely to catch on before mobile wallets, according to Boaz Rottenberg, the co-founder of Maverick China Research. Consumer indifference is not a problem specific only to China. This has also been one of the biggest hurdles in the U.S. as well. (PYMNTS)
IBM REDESIGN FOR BANK OF CHINA: IBM announced its redesign of Bank of China’s online banking platform which was aimed at creating a seamless customer experience by combining bricks-and-mortar, phone, mobile, and web banking. The announcement further supports our position that retail banks will totally rethink the customer experience to keep up with customers’ increased use of mobile technology. (IBM)
PAYPAL KEYS IN ON APAC’s SMBs: Huge numbers of consumers are taking up mobile in Asia-Pacific, and that’s turning out to be a challenge for small- and medium-sized businesses as they struggle to translate their e-commerce platforms to mobile. PayPal’s newly released Mo.Bi.Pay plug-in makes it easy for businesses to optimise their sites for mobile. (eBay)
AMEX AND JACK HENRY TO IMPROVE INTERNATIONAL PAYMENTS. A growing number of businesses have an increased need to process cross-border transactions. Payments processor Jack Henry announced that it will now offer AmEx’s FX International Payments product to its financial institution clients. The deal will help Jack Henry’s clients avoid the high fees and administrative work associated with cross-border payments while providing AmEx with a new source of revenue. (Jack Henry)
DWOLLA BRINGS DIGITAL PAYMENTS TO THE IOWA DOT: The Iowa state government announced that it would expand its use of payment network Dwolla’s services to the Iowa Department of Transportation. The partnership will allow users to make payments to the Iowa DOT online and through mobile devices for things like registration fees and fuel taxes. Dwolla offers a low transaction fee of just $US0.25 cents, which makes it competitive with larger payments processors despite its relatively small size. (Des Moines Register)
KANYE WEST’S LAWYERS SEND A CEASE AND DESIST TO COINYE WEST. In a recent newsletter we covered a new Bitcoin rival, Coinye West, set to be released on January 11. After receiving a cease and desist letter from rapper Kanye West’s lawyers, Coinye West’s founders decided to release the cryptocurrency into the wild early. However, the founders appear to have made some partial concessions, shortening the name to “Coinye” and adjusting the image on the coin. (Yahoo)
Here’s what else BI Intelligence subscribers are reading…
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.