You won’t be car­ry­ing a wal­let for any much longer

Financial Mirror (Cyprus) - - FRONT PAGE -

Many an­a­lysts are now talk­ing about the world’s next big trend, the im­mi­nent mo­bile pay­ments revo­lu­tion that will rein­vent how we shop and spend money. News flash: it is al­ready well un­der way.

Last earn­ings sea­son, Star­bucks an­nounced that 16% of its rev­enue comes from mo­bile pay­ments; that fig­ure is ever in­creas­ing. But for the most part, head­ing into the fu­ture, Star­bucks looks like the ex­cep­tion. Rather than in­di­vid­ual shops and bou­tiques cham­pi­oning their own pay­ment apps, the tech gi­ants are in­vad­ing this space and ac­quir­ing com­pa­nies that spe­cialise in mo­bile wal­lets in or­der to com­pete to pro­vide a one-size-fits-all so­lu­tion for the cus­tomer. Ap­ple launched Ap­ple Pay, Sam­sung bought LoopPay, PayPal picked up Pay­di­ant, and Google ac­quired Soft­Card. Th­ese cor­po­ra­tions are hun­gry to get ahead in the race to dom­i­nate our pur­chases, and they are splash­ing out big time in or­der to be the most in­no­va­tive and ef­fec­tive.

The key chal­lenge will to be to of­fer a so­lu­tion that is both se­cure and easy. Cus­tomers aren’t go­ing to give fi­nan­cial de­tails away to a com­pany whose se­cu­rity sys­tems are ques­tion­able, and they aren’t go­ing to give them ev­ery time they want to make a pay­ment. That means that wal­lets must take your credit card info once and then work au­to­mat­i­cally and seam­lessly, just as when you pay for an Uber taxi or down­load a new book to your Ama­zon Kin­dle.

Re­ports last week in­di­cated that Ap­ple is cur­rently in talks with the big­gest Canadian banks, and hopes to ex­pand Ap­ple Pay out­side of the US by the end of year. How­ever, it is pre­cisely the se­cu­rity ver­sus sim­plic­ity de­bate that is com­pli­cat­ing talks. Canadian banks want ad­di­tional mea­sures to pre­vent those us­ing stolen credit cards from tak­ing ad­van­tage of Ap­ple Pay; Ap­ple wants to safe­guard its min­i­mal­is­tic ap­proach that cus­tomers ex­pect. The com­pa­nies will also need to agree on terms and what per­cent­age cut of pur­chases they each take.

There are also mo­bile money sys­tems which by­pass the need for a credit card com­pletely. Take M-PESA for ex­am­ple, launched in Kenya back in 2007. It now pro­cesses over $2 bln per month and al­lows users to buy gro­ceries, pay bills and pur­chase tick­ets from their mo­bile money ac­count. Com­pa­nies like Voda­fone are at the fore­front of this in­dus­try which has taken off in the de­vel­op­ing world. In­cred­i­bly, in 16 de­vel­op­ing coun­tries there are now more mo­bile money ac­counts than bank ac­counts.

The mo­bile pay­ments revo­lu­tion

is now be­com­ing a se­ri­ous busi­ness; it’s most def­i­nitely not a new trend. Visa and MasterCard will only dom­i­nate for as long as mo­bile sys­tems don’t. Why would any­one carry around a wal­let if they don’t have to?

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.