Mobile has long been a talked about strategy for the financial industry. But finally it is moving beyond simple online banking tasks of just being able to check account balances or receive mobile account alerts to providing sticky applications that will change a consumer’s lifestyle. Cases in point are the Google Wallet and Pay by Square. I have both. They are both fabulous and easy to use. I wish more merchants would embrace NFC (Near Field Communications) technology so that I can ditch my “real” wallet. Based on the results of a recent survey conducted by Pew Internet & American Life Project, a lot of people share my sentiment.
Nearly two out of three respondents to the survey (65%) told the Pew Internet & American Life Project that they think most people will have fully adopted the “mobile wallet” as their day-to-day means of paying by 2020….
…By 2020, most people will have embraced and fully adopted the use of smart-device swiping for purchases they make, nearly eliminating the need for cash or credit cards. People will come to trust and rely on personal hardware and software for handling monetary transactions over the Internet and in stores. Cash and credit cards will have mostly disappeared from many of the transactions that occur in advanced countries.
The mobile payments market gained a lot of traction last year thanks to Square and other mobile merchant acquirers like NA Bankcard giving a lower cost alternative for merchants to accept credit card payments. This is broadening consumer awareness about mobile apps and uses for their smart phones and tablets.
All the activity around mobile and payments is really heating up with the big brands. Here’s a short summary list to catch you up to date:
- Google acquired TxVia a payments processor to complement its Google Wallet
- There is speculation of iPhone 5 supporting NFC
- eBay has promised to “define the future of money” by using its PayPal service to replace credit cards and cash by making smartphones into “mobile wallets”
- PayPal expanded its roll out of mobile payments capabilities in Home Depot to 2,000 stores. Consumers pay by giving their phone number and pin code to a cashier.
- PayPal has also launched PayPal Here which is a credit card reader that competes with Square and also includes an application that uses the phone´s camera for processing credit cards and checks
- Square announced it is now processing $4 billion in transactions each year. The company also released an iPad app called the Square Register, which is designed to replace existing retail sales registers. The company raised $100M in cash last year on a $1B valuation and is now looking to raise $250 million on a $4 billion valuation.