The Mobile Payment Race Has Begun


My recent post for Mandag Morgen, read it here in Danish.
Mobile Payment on Tech and The City

The gladiators are sharpening their weapons in the vast digital colosseum. The battle is over tomorrows mobile payment platforms, and there are cramped in the arena. Giants like Google, Apple , Amazon and Paypal are up against challengers like Square in the battle to supply the consumers with a digital wallet in the mobile age.

Apple has with its massive proliferation of mobile devices, an optimal infrastructure to disseminate any new mobile technology.

In 2013, Apple had 575 million iTunes profiles, most of which had registered their credit card, giving Apple the world's largest database of credit card information.

Since iOS 6 in 2012 iPhone users have been introduced to the passbook, where you can store tickets , boarding passes and coupons on their phones. Rumor has it that Apple is in the process of building a mobile payment service, that will arm wrestle with payment services like Google Wallet , Paypal and Square.

If we link the iTunes profiles and their credit card database with Apple's positioning system iBeacon, that is already integrated into the 200 million iPhones, the potential for mobile commerce on Apple platforms is huge.

The scenario is that Starbucks will make your coffee when you approach the store. You pay automatically with your iPhone, and the only thing you need is to pick up the coffee with your name on the cup - without standing in line or look for your money. The coffee is hot, it is paid, and you've just released 8 minutes of your day to other analog activities.

Last year, Starbucks processed mobile transactions for over $1 billion, supporting the trends on the market, which on average has increased by 118 per cent the last 5 years.

Square, founded by Jack Dorsey, who was also a founding member of Twitter, has developed a small device that you connect to your smartphone. It allows you to pay with your credit card whether you are on a market in Marrakech or at a piano concert in your home town village. No trade is too small for Square, which directs its focus on small and medium-sized retail stores. The company is currently expanding its services with Square Market moving into the e -commerce market, and Square Cash where you can receive payment via e -mail.

Amazon has also entered the race. In late 2013 the company in its usual silent style bought GoPago, that provides a mobile payment app and retail software. Amazon is expected to deliver a payment solution for physical stores where they can sell information about users purchase behavior or undercut existing charges on credit card payment.

Consumers are ready for mobile payments 50 percent of smartphone users predict that they will use mobile payments in 2017. So the market is clear - the question is who will lead the race  on the global market?

It also gives a new perspective to the recent discussion about the sale of the Nets in Denmark. With only 4.9 million "Dankort", the Danish market will sooner or later be absorbed by other solutions that will meet the global technological developments.

The advantage is that we can get targeted deals when our need is there and we can skip the many daily routine lines - from the coffee shop to the supermarket. It will still take some years before this becomes a mainstream phenomenon. But if the benefits of changing payment behavior outweighs the disadvantages, consumers are usually ready to move to new platforms - especially when we it saves us both time and money !