For some time, we’ve heard about all of the conveniences and technological brilliance of how our smart phones are going to revolutionize our credit cards. Even those who were skeptical – and really, there were quite a few who were doubtful cash would ever not be the preferred method of currency – couldn’t deny the rapid transition from the classic swipe and pay to the evaporating need of even carrying the physical credit card. But how do things look now? Are we still moving forward with mobile payments? We took a look to see exactly how this was progressing and whether or not those same predictions were on track.
Business Insider Intelligence released its own report this week. In the extensive study, a new look at what defines mobile payments, how advanced they really were and whether or not card readers, swipe and pay and other seemingly antiquated methods were on their last legs. Other technology that was explored includes near field communications and other factors examined included the role credit card companies and banks play in the new technology.
Despite assurances by many that 2013 would see an explosion of mobile payment options, the study found that will it’s still moving along, that rapid growth hasn’t exactly panned out. Less than 8 million Americans were even using systems like Google Wallet. The newer technology, including instantly delivered coupons to our smart phones and even bar code scanners hadn’t quite caught on yet either. Of course, our editors know well that moment after we’ve checked out that we realize we forgot to send that CVS coupon code for the additional 20% off. There’s a certain human nature element that plays into everything, of course, especially when it comes to new technology.
Despite our forgetfulness, the fact is, mobile payments made on site in traditional brick and mortar stores totaled $640 million last year. Contrasted with the numbers from 2011, which totaled $170 million, it’s clear change is coming. Even if it is a slow down that consumers may not be leading.
Billions in Payments
And if you’re wondering about mobile commerce, these numbers should impress. PayPal processed a whopping $14 billion in mobile payments in 2012. Clearly as the year progressed, we began paying more attention to those options. In fact, Dollar General stores announced in late 2012 that it would allow payments via PayPal. Our own efforts showed the convenience, though it was clear to us that simply swiping and then keying our PIN number from a PayPal debit card was actually less time consuming. Even if a consumer opted to pay via the PayPal icon on the keypad, he still had to swipe the card. Instead of keying his pin number, he used the keypad to type in his password. It seemed as though the transaction actually took longer too. Still, it’s goes to show just how versatile our payment options have become. Other retailers allow PayPal users to type in their mobile phone number and their PIN. And the latest news out of the payment giant is that it will advance its technology even further in 2013. And don’t forget that Discover partnered with PayPal late last year. Word is the two will collaborate, though no one is exactly sure how that will happen.
PayPal and Square
Meanwhile, other card readers are quickly moving forward. Most visible, along with PayPal, is the Square program. By now, card readers have carved a substantial place out in the industry and in fact, the Square mobile payments volume increased to an impressive $10 billion in 2012. That’s an increase of $8 billion from the numbers in 2011. Of course, Starbucks is its biggest player at the moment, but that soon will change. All 7,000 Starbucks locations in the United States now uses Square. Many analysts point to this as proof that card readers are playing a significant role in how consumers are spending their money.
The growth, regardless of how fast it’s happening, in mobile telecommunication services along with the widening availability of mobile phones are causing many companies pause and they consider the many unexplored business opportunities. We rely on our mobile phones for everything short of marriage counseling anyway, so it stands to reason that they give us options like transferring cash from one entity to another, which, of course, ensures its versatility and relevance.
And, then there are those who seem to be a bit behind, despite believing otherwise. Barclays Bank made announcements in recent months that it was building its own mobile payments platform. In an interesting presser a few months ago, it promised to bring its customers the “future of payments”. Granted, it’s a global effort, but what it’s promising are technological advances that have been available for quite a while, including new phone apps and “tap and go” cards. It also claimed to be the pioneer for the future of payments around the world. It began in the UK and Africa and says it will soon unveil its offerings here in the states. While there were no dates mentioned, the presser promised it would soon be making mobile payments along the convenient apps available to consumers. It could be that its apps, once made available, will provide solutions for the hiccups other companies continue to struggle with. If that’s the case, Paypal and Square might want to take notice as neither have perfected their offerings. One click services are also options it’s considering which will allow an immediate connection to a live customer service representative. Now that is something to look forward to.
Another report this year provides insight to how many consumers are beginning to actually see their smartphones as extensions of their wallets on a global level,
The mobile money ecosystem comprises of telecom operators, mobile money platform providers, financial institutions, regulators, payment processors and money transfer agents,
reads the ReportLink.com study. It concludes the market is indeed benefiting from “exponential growth due to various factors such as availability of mobile phones and considerable rate of people have a little or no access to banks in underdeveloped regions”. It’s a thorough and complete effort that reveals the new technology is here to stay.