Mobile Wallet Wars – Who’s Winning in Mobile Payments
Who’s winning the “mobile wallet war?” Well, certainly Apple Pay and Android Pay are locked in close contention, Walmart Pay has broken into new territory, and Google Wallet is making a rebound and standing apart with P2P payments. However, before we can declare unquestionable dominance in the emerging arena of mobile payments, it might first be helpful to recognize that all mobile payments players are equally fighting the battle for marketplace acceptance.
As of 2015, eMarketer expected 23.2 million U.S. mobile phone users were using proximity mobile payments to make purchases and predicts a 2016 growth to 37.5 million, a 61.8 percent increase. To give you an idea of what these numbers mean by the dollar, Business Insider Intelligence reports that in-store mobile payments currently account for about $20 billion in annual spend, and by 2018, they’re projected to reach $189 billion.
As the mobile payments industry evolves, all mobile players are pushing the technology into mainstream use. Traditionally, payment transfer systems like PayPal have been used to facilitate online transactions – many of which take place on consumers’ mobile devices. However, many of these systems now have the ability to function as their own payment method beyond the parameters of simple online shopping, extending to in-store purchases through NFC (near field communication) technology.
The growth of mobile payments hinges not only on the expectancy of merchants and consumers to adopt the technology, but also card issuers. Although, to a degree, many consumers and merchants are already NFC-ready – the technology comes built into most mobile devices and updated POS terminals capable of making EMV transactions – it’s principally up to issuers to decide whether or not their cards will support mobile wallets. The challenge seems to lie in all audiences finding the equal benefits of mobile payments as a preferred choice of transaction method.
With features such as fraud protection and data encryption, many mobile payment options are safer than the traditional payment methods like credit and debit cards. Additionally, on average, they’re also 35 seconds faster at making transactions than traditional forms of payment. Keeping customer information safe and speeding up the checkout process are two very big – and appreciated – advantages that mobile proximity payments bring to the register.
As eMarketer and many other industry analysts forecast, 2016 is going to be a big year for mobile payment acceptance as nearly one in five smartphone owners are expected to adopt mobile wallets. This growth is bound to produce more adopters, increasing the availability of NFC payments for further acceptance from consumers and merchants.
The early adopters and the appearance of big-brand mobile wallets are setting the stage for cardless payments, but it’s only a matter of time before a standout leader paves the way for the rest. The shift to mobile payments is already happening, and consumers are moving with it. At the forefront or behind the curve, where card issuers choose to participate is up to them. Because while it may be too early to name the victor, make no doubt about it – proximity mobile payment will prove to be a winner.