UK shows that success in the mobile commerce space is quite possible
The United Kingdom may be leading the United States when it comes to mobile payments. The latest statistics coming from the UK Cards Association show that one in 10 card transactions are now made through mobile devices using contactless systems. This has grown considerably over what it had been in the last year. In the U.S., mobile payments are still fighting to find a foothold among consumers for various reasons. If companies operating in the mobile commerce space want to ensure success in the country, they may have to look elsewhere for inspiration.
Apple Pay is fighting for a foothold in the United States
In the U.S., consumers are interested in mobile commerce, but relatively few participate in this space. Apple Pay, one of the country’s more popular mobile payments services, has found only modest success, with only 3.5% of mobile transactions actually being completed through the platform. This is actually lower than the transactions that Apple Pay accounted for in March of 2015, which stood at 5.9%. Fewer people are now using Apple Pay than in the past and this is a trend that is being seen with other mobile payments services as well.
Ubiquity may be the key to success
It companies in the United States’ mobile commerce market want to succeed, they may have to focus on ubiquity. This is something that the UK market has accomplished quite well. The country is home to the most heavily concentrated banking and acquiring segments and retailers in the country serve a very well defined geographic market. Barclays, one of the country’s largest banks, accounts for more than 40% of all credit and debit card spending. The country also has a multitude of merchant acquire options. What this means is that if Barclays backs mobile transactions, it is extremely easy for retailers to accept payments being made from mobile devices, something that is not readily apparent in the U.S. market.
Mobile commerce is growing in Australia and Canada at well
The UK is not the only country where mobile commerce is flourishing, of course. Both Australia and Canada have rapidly growing mobile commerce markets, which are becoming more competitive with what has already been established in the U.S. While mobile payments are having trouble finding momentum in the U.S., the market is still quite attractive to companies that want to provide consumers with new mobile services. There may need to be a greater focus on ubiquity in order to ensure future success, however.
Adoption of Apple Pay remains relatively low among consumers
Apple Pay is still fighting to gain a foothold with consumers in the mobile payments space. It has been 18 months since Apple launched its new payment service, which received strong praise during its initial launch. The service was heralded as something that the mobile payments space desperately needed: A simple, intuitive, and convenient platform. Since its launch, however, Apple Pay has only managed to find modest success, with 80% of iOS users claiming to have never used the service and only 3% claiming to use it regularly.
Security and illusory convenience make Apple Pay less attractive
One of the problems that Apple Pay may be facing is the fact that the average consumer does not see such services as any more “mobile” than cash or a credit card. In essence, mobile payments are meant to be more convenient than traditional forms of commerce, but this is not usually the case due to the similarity these services have with credit and debit cards. Another issue consumers have has to do with security. Many people have noted that they will not participate in mobile payments because of security issues, fearing that their financial information could be at risk of exploitation.
Survey shows that consumers favor in-app shopping over in-store mobile transactions
A recent survey from First Annapolis Consulting, Consumers are becoming more interested in making purchases with mobile applications. In Spring on 2015, 11% made only in-app purchases, with the majority, 58%, opting to use point-of-sale systems. In December of 2015, 34% of consumers opted to only make in-app purchases. Pushing in-store mobile transactions among consumers has proven difficult, as consumers appear to favor traditional forms of commerce. This has been a challenge for Apple Pay, which has slowed its adoption among those interested in mobile payments.
Competition keeps Apple Pay from finding mainstream success
Competition is also a reason why Apple Pay adoption is relatively low. Apple is currently fighting with several other companies to establish a foothold in the mobile payments space, especially after breaking into new markets. Apple Pay recently launched in China, where companies like Alibaba and Tencent have already found a great deal of favor among consumers, limiting the exposure that Apple Pay has managed to obtain.
