2014 is going to be the year of mobile payments. Mobile World Congress – the annual jamboree for the world’s mobile industry – was dominated this year by payments. Even the launches of devices, which tend now to garner all the headlines in the mainstream media covering the show – drilled down into some form of payment related tech. But perhaps the most interesting announcement to my mind around this that was made at the show was that consumers actually want it.
One of the biggest and growing bugbears with MWC is that it acts just as an echo chamber for the mobile industry, often paying scant regard to what consumers who actually fund all this actually want. But research by MasterCard and PRIME research of 13million tweets, other social media mentions and blogs globally of mobile payments – and announced on day one of the show – suggests that real people want real mobile payments.
The key finding of this report was that adoption of mobile payments is in and confusion is out. Confusion over mobile payment options found in the 2012 study by MasterCard has been replaced by discussions focusing on the quality and staying power of various products. This year’s research shows consumers have moved from questioning whether to use mobile payments (the third most discussed topic in 2012) to deciding which mobile payments option to use (the second most discussed topic in 2013).
Adopters now drive most of the conversation (81%), finds the report. Non-Adopters drove 68% of the conversations in 2012. This indicates that consumers have shifted from discussing mobile payments to trying out various options.
And all this means that merchants need to get their acts together around this. While they are entering into the online conversations – 15% of total conversations online were from merchants and 48% of merchant conversations were about m-payments – there is still a sluggishness to adopt m-payments among retailers.
Banks are very much into the idea of mobilising banking services – especially retailing banking ones – but to date retailers have held back. But they are looking. According to the research, non-adopting merchants are predominantly turning to social media to seek mobile payments advice from other merchants. Nearly 90% of these merchant conversations are now driven by those who have implemented mobile solutions, the study finds.
This research by MasterCard formed an interesting starting point for much of the debate at MWC around mobile payments. Knowing, finally, that consumers and increasingly merchants are looking to embrace m-payments set the scene at the show for the raft of payment and money related announcements at the show.
While MasterCard’s research shows that consumers are ready to adopt mobile payments – well at least to start to – Michael Abbott, chief executive of mobile payments venture Isis, a joint venture between Verizon Wireless, AT&T, and T-Mobile in the US, told delegates that he felt that the platforms are there and the interest to make mobile payments happen.
Abbott is optimistic that mobile payments will grow in a big way. He noted that the world would see 300 million smartphones shipped that are capable of using Isis's mobile-payments system. On the merchant end, 95% of the new point-of-sale terminals will ship with near-field communications, or NFC, the wireless technology Isis and Google Wallet uses to execute a transaction.
Abbott said Isis has 90% of devices covered with the compatible NFC technology, although he counts the iPhone, which needs a specially designed cover to use NFC.
Isis began quietly with two trials, one each in Austin, Texas, and Salt Lake City, but expanded to nationwide availability three months ago. Since then, Isis users tend to tap their phone to pay six to seven times to month. It is also growing at a clip of 50% each month, and two-thirds of its users have added a card.
Isis is about to push, but as Abbott admitted, its not about Isis “we can’t do this alone”.
It was MasterCard again that made much of the big name payments play at the show, unveiling a raft of payment announcements and taking up a huge stand in Hall 5 – something you wouldn’t have seen two years ago.
Back in the UK before the show, MasterCard and network operator collective Weve announced a pledge to bring NFC powered payments to the masses. While this was short on details, at the show MasterCard proved its commitment to mobile with the roll out of MasterPass, which enable consumers to make secure purchases within a mobile app.
MasterPass in-app payments eliminate the need to store payment card credentials across numerous mobile apps, providing consumers with a fast and simple payment experience. Forbes Digital Commerce, Fat Zebra, NoQ, Starbucks Australia and Shaw Theatres Singapore are among the first app providers that will power their in-app purchasing capabilities with MasterPass.
Consumers are shopping and paying in whatever way best fits their needs and lifestyles – and from every device they have. They are looking for digital ‘shortcuts’ that provide speed, convenience and a great experience. With MasterPass, this can be a simple tap, click or touch at checkout, at home, on the go, and now, directly within an app.
According to ABI Research, overall revenues from mobile applications, including in-app purchases, will reach $46 billion by 2016, more than five times greater than the $8.5 billion earned in 2011. With the average global smart device user having downloaded 26 apps, consumers are storing payment card and other sensitive information with numerous app providers to set up accounts and make purchases.
MasterPass in-app payments extend the capabilities of the current browser-based MasterPass digital service into the mobile app environment, and provide consumers with one secure direct relationship with their bank. Apps with MasterPass embedded in them enable consumers to complete a purchase with as few as one click or touch on their favourite connected device without leaving the app environment. The optimized checkout process creates a seamless shopping experience, supported by the highest levels of security and cryptology.
“We’re excited to begin offering MasterPass to our customers as an innovative digital payment solution. This fully aligns with our philosophy to make in-app commerce as easy and efficient as possible,” said Robert Tibbs, Chairman & CEO, Forbes Digital Commerce at the show.
MasterPass in-app payments is the latest offering from MasterCard to address the specific needs of the digital ecosystem. We’re creating great experiences for consumers across all channels and all devices, and enabling merchants to reach new consumers in ways not possible in the pre-digital world,” added Ed McLaughlin, Chief Emerging Payments Officer at MasterCard. “We’re also developing a framework to make all payments using MasterPass as or more secure than anything we can do on cards today, ensuring that consumers can benefit from the highest possible levels of security.”
MasterPass in-app payments will be made available to developers and merchants beginning in Q2 of this year. The service requires a quick, seamless integration similar to the process for online merchants – already successfully implemented at more than 30,000 MasterPass merchants to date in Australia, Canada, Italy, the United Kingdom and the United States.
Samsung and Paypal
One of the main announcements at the show was the launch of the Galaxy S5 handset. While the press made a huge fuss over the new device – which is really just an incremental upgrade of the S4 – one of the exciting things about the launch was the deal between Samsung and PayPal that allows the S5’s finger print recognition system to be used to pay with PayPal through the phone.
The real meat here is that S5 users will no longer have to remember and input passwords to use PayPal in stores that use PayPal’s in-store technology – which is also starting to gain some ground.
Apple, of course, was the first handset maker to introduce fingerprint recognition, but Samsung is the first to incorporate it into payments. Apple – not at MWC – can’t be far behind.
Also at the show, mobile payment innovator Zapp, announced that Elavon has signed up to offer Zapp mobile payments to merchants and consumers from 2014. Elavon will work with Zapp to provide a secure, convenient and simple way for customers to pay, instantly, for goods and services using just existing bank accounts and mobile devices.
Elavon is a leading global payments provider, each year processing 3 billion transactions worth $300 billion (USD), with 1.3 million customers worldwide.
Andrew Rush Head of Product Innovation at Elavon said, “Elavon is focused on payments innovation and continually extending the range of new services available to our customers. Offering a range of payment options at the checkout is crucial for retailers today; Zapp represents the leading UK mobile payment facility with the broadest financial services industry support.”
The news follows the announcement in January of Zapp’s lead financial partners - HSBC, first direct, Nationwide, Metro Bank and Santander - who are all supporting Zapp. Elavon join already confirmed Zapp payment partners WorldPay, Optimal Payments, Realex and SagePay who will help roll out Zapp digital payments to millions of consumers later this year.
By Paul Skeldon, Editor of M-retailing.net