This is the first article of PayUx and honestly start writing an article or academic text is always the most difficult part. But for the first article it makes sense to look at the current situation of mobile payments.
Mobile payment………seems to be a very ambivalent term. What do we mean if we talk about mobile payments? The term “mobile” is any kind of activity that we do while we are on the go with smart devices like smartphones or smart watches. Pre requisite for being mobile nowadays is to be connected to the internet and to be able to communicate with other people or other devices via mobile networks or technologies like Near Field Communication (NFC), QR-Codes or Bluetooth.
With mobile payments I associate all kind of payments that I can do with my smart devices while I´m on the go. Doing my bank businesses like paying my bills or doing other money transfers with my mobile banking application is also a part of mobile payment as well as mobile proximity/contactless payment on the Point of Sales in different shops. Also a part is paying for goods and services which I buy on the internet or with my mobile application of my favorite label or retail store. As you can see mobile payments contains a lot more than just paying with my smart phone contactless.
Most of the above mentioned mobile payment methods are already in place and work. But here we also have to distinguish between different regions and countries worldwide we see according to the “MasterCard mobile payment readiness index” many high developed countries which are ready to do mobile payments in terms of infrastructure, legal questions, and customer acceptance like Canada, Australia or the United States of America. These countries are definitely very innovative and high developed but as usually not every market is equal and can be served the same way as the others. Germany for instance still need some time especially to realize mobile proximity/contactless payments.
Up to date every player in the market like Mobile Network Operators (T-Mobile, Verizon, O2 etc.), Financial Institutions (CommBank Australia, Bank of America or Deutsche Bank etc.), Payment Schemes (MasterCard, Visa, AMEX etc.), Retailers, Technology Giants or even Start Up´s are trying to get a part of the mobile payment cake. Every single player mentioned above wants to create their own Unique Selling Proposition and address their own products to their customers. Thereby these players are also looking for cooperation’s to bring their products to the right customer group. All these players above and consortiums of them have already tried to create solutions and standards for the crucial and missing piece ….mobile proximity/contactless payment ….. but most of them failed.
The participation of Apple, the technology giant from Cupertino (California) has triggered compared to the other market players a huge Tsunami. With the launch of the iPhone6 and the integrated NFC Chip and the secure element Apple started to set the course for their mobile payment market entry. As you can assume, if Apple the biggest brand in the world starts to participate in a certain market everyone is going to follow them and to take action. Right now Apple Pay is the answer to all approaches of Financial Institutions and Mobile Network Operators for all iOS devices with an integrated NFC-Chip (up to now only iPhone 6 and iPhone 6 Plus). As Apple Pay is such a massive market changer we will look more detailed into this payment system in a further article.
With Apple Pay they set a high standard in the user experience, simplicity and also the security (privacy) of a mobile payment solution. This standard is now an indication and also a call for action for other market players.
Conclusion:
In general mobile payment has a huge market potential and is a very interesting market for different players. In the past view year’s different market participants have already created various and very promising solutions for any kind of mobile payments. But with the launch of Apple Pay and the decision to integrate NFC into the iPhone Apple has brought a lot of good movements into the market. In my opinion we will see a lot of new solutions in different countries for any kind of mobile devices in the next view years. The mobile payment market is just in a very early stage and there is a lot more to come.
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