Tag: mobile payments competition

As smartphone based transactions take off at breakneck speed, everyone is trying to hop aboard.

The speed with which mobile payments services are growing and are becoming accepted have now made it clear to most large banks that if they want to be able to remain relevant into the future, they will need to be able to offer their customers the ability to pay for goods and services through the use of smartphones.

Many telecoms and credit card companies are also hopping on board this massive trend.

Even retailers are starting to come up with their own opportunities to hop onto the mobile payments bandwagon and are coming up with their own unique strategies. As the shift toward smartphones as a platform continues, a growing number of companies from massive international giants to small mobile app development startups are trying to turn themselves into important players in this sector.

As mobile payments adoption becomes more common, the competition for those positions is growing.

In fact, it has already reached the point that solutions providers are trying virtually anything to carve out their share of this market, and to continue clawing to broaden that share. Unfortunately, as this continues to occur at an increasingly rapid rate, it is also causing this particular market to fragment. The technology as a whole is owned by many groups and within each group there is a flood of different players. Every one of them is looking to dominate as opposed to creating a consistent experience overall.

The result has been the development of what David Sear, Weve managing director, called a “mess”. He pointed out that “It is confusing for people and for banks, as well as being costly all round.” He explained that scalability is critical in order to make this market work. While it is currently questionable whether the situation is contributing to bank revenues in any way, it is undoubted that these institutions must hang onto it, regardless, in order to succeed in the future.

This fact makes the future of mobile payments extremely hard to predict. The form of it, at the moment, suggests that it will only continue to become more muddied and complex before it has the ability to improve.

At the moment, in terms of merchants and consumers, the company may be considered the leader.

PayPal, already a leader in the online transaction industry, is starting to be considered to be the frontrunner in mobile payments, as well, as it boasts the largest estimated number of merchants and consumers within a “digital wallet” sphere.

Furthermore, the company is aiming to expand this possible lead with the addition of new partnerships.

PayPal has just announced that it is partnering with Discover and NCR in order to further boost its mobile payments offerings. The eBay owned company has been a leader in online purchases for fifteen years, but were able to process more than $14 billion in transactions over tablets and smartphones last year.

The PayPal Here mobile payments service has allowed the company to define itself in this channel.

The success that PayPal has had over mobile payments has been considerable enough that they feel that they are starting to chip into the transaction processing sector, which has long been held by major credit card companies. This has also allowed consumers to start to be able to pay for their purchases in a seamless way, using their cards, but without having to actually carry the plastic.

The PayPal Here mobile payments card reader is also rapidly becoming popular among small businesses. This is because it allows those companies to use any smartphone or table to have a small card reader plugged into its audio jack without the need for large POS equipment or its associated rental or purchase fees.

Now that the Discover partnership has been added to PayPal’s growing set of deals, it will mean that the company will be expanding to 2 million more brand name locations by the end of this year.

That said, one of the mobile payments company’s primary goals is to eliminate the need for a card reader altogether so that the app can be used on consumer smartphones in order to replace the plastic cards. Though this service is available at a few thousand stores already, the extra two million will exponentially grow this opportunity.