Dig­i­tal wallet ser­vices gain ris­ing ac­cep­tance

China Daily (Hong Kong) - - YOUTH - By GE­ORGE AVA­LOS

Money and wal­lets sim­ply aren’t what they used to be.

Tech gi­ants’ card-less pay­ment ser­vices — in­clud­ing Ap­ple Pay, An­droid Pay from Google and Sam­sung Pay — aim to ease the path to the truly dig­i­tal wallet, and re­searchers project huge growth in adop­tion by re­tail­ers and con­sumers. Even staid fi­nan­cial gi­ants such as Wells Fargo and Bank of America are be­hind a push to en­cour­age and en­able cus­tomers to ac­cess ATMs with­out their debit cards.

Yet the dig­i­tal wallet busi­ness has got­ten off to a rough start, said Bay Area-based an­a­lyst Trip Chowdhry, man­ag­ing di­rec­tor with Global Eq­ui­ties Research.

“There have been many false starts in this in­dus­try,” Chowdhry said. “The cur­rent pay­ment meth­ods are in­tru­sive, and they are not seam­less.”

Even so, card-less pay­ment ser­vices are here to stay.

“Mo­bile prox­im­ity pay­ments, en­abled through near-field-com­mu­ni­ca­tions, are pro­jected to vastly in­crease to $118 bil­lion in 2018, up from $3.5 bil­lion in 2014,” ac­cord­ing to a re­port by Statista, a web-based data and sta­tis­tics com­pany.

“Some of the ben­e­fits of mo­bile pay­ments in­clude the speed of pay­ment, the con­ve­nience as well as the in­te­gra­tion with pre­ex­ist­ing loy­alty and coupon pro­grams.”

These ben­e­fits point to a brave new world of vir­tual wal­lets.

The most com­mon mo­bile-pay­ment ac­tiv­i­ties in­clude pay­ing bills through a mo­bile phone or web browser, buy­ing items or dig­i­tal con­tent re­motely with a phone, and pay­ing for goods in a store with a phone, ac­cord­ing to the Fed­eral Re­serve Bank in a re­port ti­tled “Con­sumers and Mo­bile Fi­nan­cial Ser­vices 2016”.

As of December 2016, Ap­ple Pay led the way in North Amer­i­can re­tail­ers’ adop­tion of mo­bile-pay­ment sys­tems, with 36 per­cent ac­cep­tance, ac­cord­ing to Statista. PayPal had 34 per­cent ac­cep­tance, Mastercard PayPass had 25 per­cent, An­droid Pay had 24 per­cent, Visa Check­Out had 20 per­cent and Sam­sung Pay had 18 per­cent, the re­port said.

One of the next steps, an­a­lysts say, is to make pay­ments seam­less for the con­sumer, and to make it easy for shop­pers to pick up items in stores with­out lin­ing up at check stands.

This sort of con­ve­nience is al­ready avail­able in a dif­fer­ent in­dus­try that new tech­nolo­gies have dis­rupted: “Uber and Lyft en­able users to sim­ply get out of the car at the end of the jour­ney, while the app seam­lessly pro­cesses the fare in the back­ground,” Sun­ny­vale-based tech­nol­ogy com­pany Ram­bus noted in a re­port.

The tech­nol­ogy providers also need to over­come con­sumers’ wor­ries about se­cu­rity.

Camp­bell-based mar­ket re­searcher Cre­ative Strate­gies re­cently stud­ied dig­i­tal wal­lets to as­sess bar­ri­ers to greater adop­tion of the ser­vices.


Peo­ple living with­out cash en­joy the real deal: Cus­tomers who shop at a veg­etable mar­ket can pay via Ali­pay or WeChat, as seen here in June in Wuhan, Hubei.

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