Mobile payments are exploding in growth and popularity, and plenty of evidence supports this claim. The NBA’s Sacramento Kings, for example, will begin accepting Bitcoin, an exclusively digital currency, as a payment method starting March 1, 2014. A state of the industry report released by Mobile Payments Today indicates that 46% of those surveyed will use email to send or receive payments, up from 24% a year ago. WorldPay also released a study that noted alternative payments (any form of payment other than a credit or debit card) will increase to 59% in 2017, up from 43% in 2014.
The mobile payments industry clearly will continue to skyrocket now and in the future. The question on everyone’s mind is: What’s next?
Writing on the Wall
While it’s impossible to predict exactly when and how, the writing on the wall suggests:
1. Businesses that don’t allow mobile payments will fall behind.
If consumer demand for mobile payments increases, businesses will have to step up to meet the demand. Those that don’t risk falling behind the rest of the pack or going out of business entirely.
2. The market will consolidate.
The big companies will push their mobile payment systems hard. Apple’s iBeacon, as an example, will begin accepting mobile payments to some extent in 2014. Intuit GoPayment is another large-company payment system that could snatch up market share. Besides the big companies, established specialized businesses and startups are in the game too. There’s only room for so many players. We’ll have to see who wins, who loses and who gets bought out as the market matures.
No industry is without its drawbacks, especially the mobile payments industry. What pitfalls does the mobile payments industry face? What to watch for:
1. Consumer concern about the security of their financial information.
Doesn’t everything in the mobile industry almost always boils down to privacy? Reports about breaches of consumer data are constant. In this past year, the NSA has observed more than 120 million Verizon wireless customers. And just recently T-Mobile had an undisclosed number of customers get their Social Security and driver’s license information stolen. Those companies who place security first will find themselves at the head of the pack in 2014 and beyond.
2. “Mobile cramming.”
This term describes the security-related idea of third parties making unauthorized purchases from consumers’ mobile phones. It may be literally impossible to completely eliminate all security threats. So when bad things do happen, companies who have clear resolution processes in place will maintain a strong competitive advantage because of their desire to put customers’ needs first.
In such a hyper-competitive industry, the year ahead promises to be interesting, especially given the fast pace of the technology-related industry. With new gadgets like Google Glass, Samsung’s SmartWatch and Apple’s iWatch potentially flooding the marketplace, mobile payments will only be in higher demand.
Business is all about customer service. When your customer finds it more convenient to buy your goods and services over their mobile device you have to accommodate them. Sure there are challenges as with any emerging technology but why give up market share waiting for perfection?