Guest post by Cellum SVP Jeff McAllister
When looking at future developments in mobile payments it is important to first of all recognize that the industry is following – and will likely continue to follow – a path similar to that of other disruptive or changing technologies. After an initial buzz or breakthrough in the market, there is a great need for education, a subsequent wave of new players and technologies and finally greater standardization, consolidation and then mass adoption.
This larger arc of development leads to fits and starts and makes forecasting – at least within a set timeframe – very difficult. Still, looking over the next year or so I see the following as good bets:
- As smartphone penetration skyrockets worldwide, people will want to do more and more with their devices – including making payments and purchases anytime, from anywhere.
- The mobile payments industry as a whole will face an extended “NFC hangover” from both end users and retailers who have felt underwhelmed by the technology. This will lead to an acknowledgement in the industry that proximity payment solutions must be complemented with remote capability.
- QR-code based remote payments will continue to advance, and combined with BLE (Bluetooth Low Energy) for proximity use cases will provide user-centric benefits and change paying habits in key markets like the U.S., where credit card and smartphone penetration provide the key factors for success.
- The industry will be forced to make a massive effort to persuade consumers that mobile payments can be secure because of an increasing realization that without confidence in security, mobile payments won’t be able to achieve critical mass.
- There will be significant consolidation in the payments industry, as well as a number of IPOs of standout players in the space.
- Conversion rates will jump significantly as payment processes are streamlined and users get more comfortable and adept at making mobile payments.
- Retail banks will accelerate their push into the mobile market with better apps and related services that redefine their relationship with their customers.
- We will hear less hype about Bitcoin because of a continuing move by government authorities against cybercurrencies, this despite broader adoption and use in some customer segments.
- Carrier billing in emerging markets will see tremendous growth amid demand by consumers in less-affluent countries with no access to debit or credit cards.
- There will also be explosive growth in the use of mobile payments for remittances, linking users in developed economies and emerging markets.
- Cyber-criminals will begin to focus more on mobile payments as their prey increasingly adopts such systems.
- Mobile wallets will continue to undergo significant changes as the industry begins to hone in on specific features and design elements that give them a convenience edge over cards.
- Apps and other consumer-facing mobile payment tech will get faster as the industry adapts to the reality of an average end-user with an increasingly short attention span and patience.
- The winners in the industry will provide more than just card vaults and payment gateways. They will partner with retailers to turn their solution into a new sales and marketing channel and help make smartphones the essential shopping tool for consumers.