Growth of Mobile Payments
Smart technology is experiencing a boost as the interest in digital payment methods is increasing among consumers and new platforms are being introduced by companies like NXT-ID (Nasdaq: NXTD) , Apple, Google, Mastercard, and Visa.
NXT-ID is now trading on NASDAQ and is set to launch Wocket, a smart wallet. The company is in the biometric authentication business and focuses on mobile commerce. Apple recently announced Apply Pay which is expected to lead to widespread adoption of digital payments. Apple Pay is specifically for digital payments and will only work for iPhone and iTunes users. It does not have any extra uses like loyalty cards.
Apple sold more than 10 million units of the new iPhone last weekend, which are automatically compatible with Apple Pay. The service will launch in October and allows users to pay with a tap rather than with cash or a card. It is linked to a debit or credit card.
However, there are many consumers who refuse to use their mobile devices for payments. Issues of acceptance, privacy, and battery life are barriers to adoption of the phone-based product
Samsung, Google, and HTC have attempted to enter the market with near-field communication technology. Payments through NFC are expected to hit $8.2 million in 2014, doubling the total in 2013. That is only 2.5% of all mobile payments, which encompasses all forms of payment that can be made using a mobile device.
Starbucks, a popular coffee retailer, has been allowing its customers to use their smart phones to pay since 2011. On average, the company receives $6 million mobile transactions in the U.S. per week. Approximately 15% of U.S. Starbucks payments are made using a mobile device compared to 5% in 2013.
Only time will tell exactly how successful the mobile payment industry will become. As for now, mobile payment platforms are doing their best to convince consumers – as well as suppliers – to enter into the mobile payment world.