24 Sep 2014 Is a cashless society finally on the cards?
Hype around mobile payments has existed for years, and several false starts have led most of us sceptics to believe that this hype is tantamount to nothing more than hot air. However, given some key developments in the FinTech sector recently – such as Apple’s latest NFC-enabled phone and Pay function, Facebook’s relentless pursuit of an e-money license, and a rising number of mobile payment developers forging more meaningful partnerships with high street banks – the tide appears to finally be turning.
Developments in e-payments have demonstrated to customers the tangible value of adopting such digital innovations, paving the way for greater take up of mobile payments in the coming years. A good example of this is the prolific adoption of contactless payments across the London public transport network. These save time and boost convenience – at no extra cost to the customer – increasing the propensity to take up additional digital payment products in the near future.
More significantly though, mobile payment firms are now forging increasingly powerful and meaningful partnerships with high street banks and retailers. This is significant because the success of mobile payments relies not only on its convenience and sophistication but also on widespread adoption and backing by major players.
UK’s Paym is just one of such companies. Backed by all major UK banks – including Lloyds, HSBC and Barclays – it enables users to send payments simply by using the recipient’s mobile number. Yes, that’s right – no more 16 digit card numbers to type in, no more sort codes or account numbers to remember, and certainly no more excuses for not paying borrowed funds back!
One brand with the potential to transform this market is Apple. It hopes its latest innovations will eventually replace consumer wallets. The new Apple Pay function, integrated into the iPhone 6, will allow customers to make payments without launching an app or even unlocking their phone. These new features could fast track the progress of mobile payments. With a loyal and very large customer following, Apple has a proven track record in taking technology and bringing it to the mainstream. This coupled with an existing database of credit card details attached to iTunes, puts Apple in a strong position to quick start this market.
Having said this, some retailers – such as Walmart and Best Buy – have already shunned the giant’s NFC technology due to excessive associated costs and its inability to function with other operating systems such as Android. This, coupled with relatively slow smartphone replacement cycles, could therefore hinder the highly anticipated adoption.
So while on the surface it may look like mobile payments are still waiting to take off, behind the scenes a colossal battle is brewing with traditional banks and credit card providers, mobile phone behemoths, and social media sites – all vying to manage our future financial relationships and mine the valuable data that comes with it.