Mobile payments once again on the cusp of taking off
The popularity of mobile payments has been steadily on the rise for many years, now. Ever since the first service came online there have been whispers, rumors, and promises that mobile payments would spell the end of traditional and bulky credit card payment terminals, and possibly even of credit cards themselves. This, of course, has yet to happen.
Still, the demand is certainly there with a market flooded by competing platforms, from Google Wallet to PayPal and others, and in the past few years, mobile payment transactions have more than tripled. In 2012, there were $539 million in mobile transactions. Current estimates have these transactions hitting nearly $58 billion within the next three years.
Still, businesses have not yet adopted these platforms in any sort of widespread form, instead opting for merchant services that offer mobile card payment terminals, still an advantage over their bulky, specialized predecessors in many ways, including security, as shown by the recent Target hacking scandal. Why is this?
Part of the reason is that the convenience of mobile transactions isn’t that much greater than simply swiping your credit card. There is basic logic at work: when there’s not a perceived problem, a solution is not quick to be adopted. In short: there’s no incentive for consumer demand, and until there is, businesses will likely stick with card payment terminals.
Value incentives will be needed to fuel this transfer, in terms of customized offers. For example, if your device senses that you are at one of your favorite stores (via its location feature), it could automatically send coupons and special offers for that store. Versatility is also a must—PayPal, for example, allows for multiple forms of payment. It can be done online, as point of sale, via a mobile device, or even through a prepaid debit card.
Finally, as more popular vendors adopt this sort of payment, it will likely gain more traction. For example, as retailers such as Walmart, Target, CVS, Sears, and the like begin to adopt mobile payment functionality, the popularity will increase. Amazon, too, has been experimenting with expanding its Amazon Payments feature, and should this evolve into a mobile wallet, the functionality will certainly represent a big move away from the traditional card payment terminal.