There are so many companies vying for space on the mobile payment court that, even at this early stage, the market is shaping up like a tin of sardines. Tech companies, social media services, payment providers, banks and retailers are battling to claim an early slice of the still-baking pie. However, even with this level of competition, there’s still one industry keeping quiet. And it may hold the ticket to mobile payments arriving in the mainstream.
Who Are the Major Players?
Paypal is set to split with eBay to concentrate on its own business, with offline and in store mobile payments being a big part of its future plans. Although PayPal is rivaling Amazon and Square from a B2B payment handling perspective, it’s also playing a role on the consumer side in encouraging shoppers to pay in store, on mobile, via PayPal.
Apple released the iPhone 6 and iPhone 6 Plus with Apple Pay, which uses near field communication (NFC), coupled with its fingerprint scanning technology to trigger payments from credit card information stored in Passbook. NFC has featured on Android phones for some time, but it’s Apple’s knack for making things work that has the industry predicting its success.
Rivalling Apple Pay is Google Wallet, which also uses NFC, but has only been adopted by the small group of tech enthusiasts so far. However, the same can be said for all other mobile payment options, given the market’s infancy.
Twitter announced this week that it has teamed up with the largest bank in France, Group BPCE, to launch mobile payment platform, S-Money. This trial will test the waters and, if all goes swimmingly, S-Money could cause a major upset to the likes of PayPal, Google Wallet and Apple Pay, given the vast user base of Twitter.
Joining the party, Facebook recently leaked photos of alleged mobile payment-enabled code that’s sparked rumors of its messaging app having the capability to transfer money.
Mastercard’s MasterPass and Visa’s Checkout are digital representations of customer credit cards and see the two payment middle-manning heavyweights also foray into the mobile payment space.
There are also rumors of the banks introducing mobile payments via their apps, so that you could pay straight from your bank, direct to the retailer. This will bypass third party services such as PayPal or Apple Pay and potentially provide the most convenient, secure and trusted payment service on offer.
The Missing Link
Each of the above companies has the potential to dominate the mobile payment market. But, there’s one industry that could disrupt this and it hasn’t yet reared its head.
I’m sure we’ve all used SMS messaging to donate to charities. You text an amount to a number and the cost is added to your cell phone bill at the end of the month. This is perhaps the most convenient method of payments for users and doesn’t require any other account or registration with a third party payment operator.
What if you could pay in-store for high-ticket items in the same manner? Just text the retailer with the item number and the amount is added onto your phone bill.
The potential is certainly there for cell phone networks to overtake third party payment providers while the night is still young. After all, network operators already have a captive market, secured into contracts, with people that trust them and are familiar with the payment process.
The difficulty in standardizing mobile payments will be immense and the competition inevitably strong. There won’t be room for everyone and we’ll likely see some fall by the wayside. As with any emerging industry, getting first to market may prove to be imperative. But one thing is for sure, cell phone operators could cause a major upset to these first movers, if they get a move on themselves.
Will mobile payments help your business? We’d love to get your thoughts in the comments below.