In 2013 worldwide retail transactions accounted for $15 trillion and mobile payments were $235 billion with forecasts exceeding $720 billion in mobile payments by 2017. There are many big players vying to capture this channel of service like PayPal, Softcard, CurrentC and now Apple Pay. The problem is that not all retailers have switched to near-field communication (NFC) that allows communication between devises, like a mobile phone and point of sale. Apple Pay is aligned with big banking and the credit card companies and charges them a fee, changing the face of merchant credit card processing fees and the need of a merchant account.
In the U.S., mobile phone usage is replacing desktop and laptops with easy research abilities, shopping and the purchase of goods. There are still many mobile phone users unfamiliar with mobile pay, how it works and how secure it is. The most comfortable U.S. generation with mobile payments are the millennials (ages 18-34) with 55 percent using mobile wallets. Amazon has one touch capability making purchases convenient on mobile, but only in its application, and Apple takes security to a new level by encrypting payment data, removing payment methods from the iPhone and using fingerprint scanner Touch ID to authenticate payment.
Six billion people have access to a mobile phone, but half of the working population does not have access to a bank account. Developing countries are driving mobile phone subscriptions with traffic expected to increase dramatically between 2014 and 2019. By 2017 Latin America is forecasted to grow by 67 percent and Asia Pacific to have 47 percent of the global mobile market. Mobile phones will continue to dominate the desktop and laptop markets and with developing countries that have weak financial systems, mobile platforms will give individuals access to e-commerce.
A Changing Environment
Apple has proven to be a driving force when it comes to consumer behavior, like music and iTunes, and with 900,000 users can make an impact on mobile payment with their enhanced security measures. The millennial generation’s comfort level with mobile wallets and the use of mobile payment will be a driving factor for this technology. As the developing countries continue to get access to mobile phones, easier than the difficult and lengthy process of getting a debit or credit card, individuals will turn to them to handle their banking needs and credit card processing fees and merchant accounts may become things of the past.