The mobile payments space has been touted as the next big thing for some time now. For almost as long as the mobile device revolution, industry watchers have predicted that the ubiquitous nature of mobile devices signaled the end of the traditional wallet -- that, soon, cash and credit cards would give way to a new technology embedded into our mobile phones.
So far, it hasn’t happened.
Most people continue to pay for things using traditional credit cards and cash. But don’t get me wrong, the mobile payment revolution is coming -- it’s only a question of when. Here are three recent trends that are set to help accelerate the pace of innovation in this space:
vodafone_de, Flickr
1. Make mobile payments a feature of a larger platform.
How it works: Currently, some of the biggest players in the tech industry are working on their own homegrown payment solutions. All of these solutions could be lumped together under the label [Tech Giant] Pay.
While these solutions have a lot in common, they aren’t one-to-one copies of each other. Broadly, they rely on near field communication (NFC), tokenization, fingerprint readers and a mix of other technologies to provide a seamless option for users.
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Who’s doing it: Apple Pay, Android Pay and Samsung Pay (notice a theme?).
Why they’re doing it:What ties all of these competing services together is the strategy behind them. They’re all designed to integrate with the platforms of their respective companies --
Beyond that, it appears that the purpose of these services isn’t necessarily to become a leader in the payment space, but rather to support the continued growth of the larger platform and vision.
2. Use mobile to offer a better deal and experience.
How it works:Instead of focusing on the last mile of the problem -- making the payment itself -- companies are focusing on loyalty and trying to change the way retailers offer their products to customers. These companies leverage the wealth of data that retailers have about purchase history to craft a unique offer for each customer.
In addition, this strategy allows for a seamless experience between online and offline, easily allowing customers to make purchases with their phones and redeem those purchases offline.
Who’s doing it: One company that is taking this approach is Yoyo Wallet.
“We look at mobile payments and we take it as a given that this is the way the industry is moving. We are going to pay for things with our phones,” said Alain Falys, co-founder & CEO of Yoyo Wallet. “What is more interesting for us, is the question of the relationship between the consumer and the retailer. A lot of the big players today have a narrow focus on payment, but they aren’t bringing added value beyond that. We are leveraging the untapped data from transactions to gain insights and create personalised marketing.”
Why they’re doing it:The idea is to change the relationship between retailer and consumer by offering a more personalized experience. For instance, instead of walking into a coffee shop to buy a cup of coffee, users will receive an offer for a better deal, such as 12 cups of coffee for the price of 10, which they can purchase in advance and redeem whenever they like.
This is essentially the same idea as an old fashioned loyalty card, but in reverse. This is a completely new way to buy things that is being enabled by the same mobile payment innovations that we see from other players.
3. Use mobile to make transactions easier.
How it works: There are a host of payment apps that allow users to easily move money to other individuals without the hassle of cash. This is perfect for when you’re out with a group of friends and struggling to split the bill. These apps streamline that by enabling one person to pay with a credit card and everyone else to pitch in via an app.
Who’s doing it:
Why they’re doing it:What’s clever about this approach is that it’s allowing these services to build a large user base by solving a common (and painful) problem. Think of this as a ground-up approach -- starting with a problem between end users and then working up from there. If these apps are able to build a large enough community of users, it could be easy for them to transition into the same retail spaces that the tech giants are tackling head-on.
What about you? What services do you think are going to transform the way we pay for things? Let me know in the comments.
