Mobile payments to outstrip card deals
The latest World Payments Report says that mobile payment will take that 15% market share by 2013, so if that rate of growth continues it will overtake card payment within 10 years. That, in turn, will lead to some fundamental changes in the repayment market.
Findings from research outfit IEMR backed this analysis. The firm's latest report predicts a 30-fold increase in mobile payments by 2015 from 2010 figures of $31.5bn. It sees near-field communication (NFC) driving a significant part of that growth. There were 1.5bn NFC transactions globally in 2010 and IEMR reckons that number will double every year until 2015.
Cheques bounce outThe World Payments Report found cards are still the preferred method of non-cash payment, with a market share of more than 40% in most markets. There were 22.5n payments made electronically or via mobile in 2010. The use of cheques continued to fall, with just 16% of transactions settled by this method.
Taken together, says the report, these trends will "reshape – aspects of the payments market and the positioning of the players who operate within it". One of the key challenges the report raises is the need for "banks and other payment service providers... to distinguish their propositions".
Put simply, that means banks and stand-alone payment service providers will need to do more to convince customers to use them. Banks may need to choose whether they are wholesale payments providers or retail payment services providers.
TransparencyTransparency is also becoming a much bigger issue, with service fees to customers under growing scrutiny. And the need to innovate to ensure that the technological solutions exist to meet the evolving needs of consumers will become more important.
There's an interesting point to be considered here. It would seem that after years of paying in the way 'they' want 'us' to pay, now consumers are increasingly dictating how payment is taken. Is that a demonstration of consumer power, or a demonstration of how defined we are by our ability to consume?