Posts Tagged Mobile payment
Over the past six months there has been lots of buzz about mobile payments. High-profile companies such as Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) and Visa have all indicated they are exploring ways to make money from mobile payments. And at last month’s Mobile World Congress conference in Barcelona, Spain, the momentum around mobile commerce and Near Field Communications seemed to grow even stronger. In fact, several firms including Research in Motion (NASDAQ:RIMM), Deutsche Telekom and Orange all talked about how they were incorporating mobile commerce and/or Near Field Communications technology into their future plans. Some companies even went so far as to designate 2011 as the year for NFC payments.
We are under the impression that cellphone manufactures will be offering a secure mobile payment method – Near Field Communication
(NFC) short-range wireless technology and includes real-time anti-fraud alerts and other features designed to protect consumers from fraud.
Fine-tuning the business model for this nascent service is challenging. Wireless carriers, platform providers, device makers and financial institutions all want a piece of the revenue pie. It’s not surprising, considering that many analysts estimate that the market potential for these services is enormous. According to Portio Research, mobile payments volumes worldwide were $68.7 billion in 2009 and are forecast to reach $633.4 billon by year-end 2014. The biggest potential markets for mobile payments are Asia-Pacific, Europe and North America, Portio says.
But for mobile payments to reach the potential predicted by Portio, a lot of diverse players will have to fit together to make a compelling and lucrative solution. How that will happen is unclear. All we know for sure is that there is a lot of experimentation in the market today.
To help spur the market, the GSMA is heading up a NFC-related initiative with several of the world’s biggest operators including America Móvil, Axiata Group Berhad, Bharti, China Unicom, Deutsche Telekom, KT Corp., MTS, Orange, Qtel Group, SK Telecom, Softbank Mobile, Telecom Italia, Telefónica, Telekom Austria Group, Telenor and Vodafone. The operators have said they intend to launch commercial NFC services in select markets by 2012.
In the U.S., mobile payments have made headlines lately because of the new initiative Isis, which is a joint venture from Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T) and T-Mobile USA. The carriers plan to leverage Discover Financial Services’ network to process payments; Barclaycard U.S. will be the first issuer. Isis has inked deals with merchants but so far has not revealed the names of those merchants or more details about when it will launch.
Meanwhile, Sprint has decided to go it alone with its mobile wallet initiative, called Sprint Mobile Wallet. Unlike the Isis project, Sprint’s wallet will let customers make purchases using their existing Visa, MasterCard and Amazon accounts. Sprint is going to eventually hit the big one, you have to admit they always have their hat in the rink, and sooner or later they are going to hit one out of the park.
Clearly for mobile payments to become a success, merchants, financial services, operators and device makers need to come together to make a viable solution. Perhaps all this experimentation in the market will result in less fragmentation and more cohesiveness. We are exploring those issues and more in “Cashing in on Mobile Commerce,” a new eBook from FierceWireless. In this eBook, we take an in-depth look at the overall potential for the mobile commerce market, profile some successful mobile payment implementations and explore some of the latest initiatives in barcodes, mobile coupons and more.
Now you can pay for that latte with cash, credit card or mobile phone.
Starbucks (SBUX) , which tested mobile payments in select stores and Target outlets in the past year, expanded the program nationally to all its 6,800 company-owned stores starting Wednesday.
There are a handful of mobile payment experiments in operation now, including Bling Nation in Palo Alto, Calif., and Mocapay in Denver. But this is the biggest rollout to date for mobile payments, says Gwenn Bézard, analyst with the Aite Group, who follows mobile payments. Tech analysts expect substantial growth in mobile payments in coming years as more of us lead our daily lives on our phone.
“This is a more convenient way to pay,” says Starbucks Vice President Brady Brewer. “Your wallet or purse isn’t always with you, but the mobile phone is.” Customers pay using apps available on their iPhones or BlackBerrys. Download the app, and fund it with your credit card. When you reach the barista at the counter, hit the “pay” button, show the bar code, and scan it to complete the transaction. Starbucks says it’s working on an app for Android phones.
“Starbucks is using an interim technology that’s available today,” Bezard says. But he thinks the future of mobile payments will be based on a technology called near-field communications (NFC), which embeds a payment chip inside the phone.
NFC is popular in Asia, where many phones already have built-in chips, and retailers to support them. Juniper Research says $200 billion will be spent worldwide via mobile payments by 2012, up from $100 billion in 2010.Verizon Wireless, AT&T and T-Mobile recently announced plans for a joint venture, Isis, to offer NFC purchasing via phones. Testing is scheduled to begin next year.
The success of its gift card sparked Starbucks’ interest in mobile payments. “Customers liked the speed of the card,” Brewer says. About one in five retail transactions are done with the card, and customers have loaded more than $1.5 billion onto them, Starbucks says.
Starbucks began testing mobile payments in 2009. To expand nationally, it had to retrofit older scanners with new ones that could accept the bar code from the apps. “We’re going to see big adoption,” Brewer says. He wouldn’t say how much the changeover cost the company.
If anyone has information at the estimated costs for starbucks to integrate this modality and upgrade their hardware and Scanners, please share. Thank You!