Recently it was reported that China’s Union Mobile Pay saw mobile commerce (m-commerce) sales volume equivalent to $4.4 billion U.S. (30 billion yuan, which is about 3.1 billion euros). Union Mobile Pay also reported 140 million registered users, as of the end of last year. That’s certainly makes a strong case for the efficacy of m-commerce, but of course the caveat here is that China is “mobile-payment friendly” -- something that North America and Europe cannot claim.
I talk to many clients that are looking for direction when it comes to m-commerce. While many retailers are currently leveraging mobile from a marketing/promotional perspective, fewer have “crossed the chasm” to offer mobile payment, revered as “mobile on steroids” in a recent article that purports mobile pay may triple cross channel effectiveness. Apparently, 57% of consumers recently surveyed said they want mobile payment and 90% of those consumers said they would pay more for the ability to pay using the mobile channel. Additionally, 64% said they would switch carriers for mobile payments and 58% would switch banks.
These numbers seem to make a strong case for the value proposition behind mobile payment so why is it not present and accounted for? There’s been a plethora of reports regarding security issues surrounding mobile phones, and this is one area of definite concern for retailers considering mobile commerce, but Evan Schuman of StoreFrontBackTalk points out that one of the biggest issues thwarting mobile payment is that folks (mobile carriers, banks, credit cards and retailers) can’t seem to agree on how the pie should be divided. While these players are fighting it out, other vendors are plugging an alternative -- the means for retailers to offer their own mobile payment service to customers without adding any new hardware or becoming dependent on so-called bank- or carrier-controlled Near Field Communications (NFC). Lest they choose the “wrong horse” and find themselves having to backtrack, many retailers are sitting it out on the sidelines, waiting for industry standardization.
What do I think?.. I think that one of the big guys will eventually step up and publish a mobile payment solution that the devices, apps, and security guys all like, and this will become the acceptable standard. It may have a VISA or Mastercard or another logo from one of the big IT houses. My money is actually on PayPal. They’ve got to get their costs down ... obviously … but they’re in the right place to capitalize on this. A strong web presence, acceptability by GenY users, and they’re getting into the payment processing space in a big way. The only downside is the account access to pay for goods. (But believe it or not, I have made my first retail purchase using PayPal. I bought some tires/tyres and paid the deposit at the shop by logging into PayPal and paying him directly.) I must admit I was a bit worried about using the guy's PC and going into my own account, but, it worked out okay. Once this is held on an app, Paypal will be flying!
What do you think? Are you moving ahead with your m-commerce plans, or taking a wait-and-see approach? Post a comment and I’ll follow up with you.
Posted by Duncan Taylor, Director, Product Management, Epicor