The Mobile Payments Landscape, Post-Mobile World Congress

23rd March 2015

Mobile payments were a hot topic at this year’s Mobile World Congress (MWC), and we were glad to be a part of the buzz. Samsung “unpacked” its Galaxy S6 and S6 Edge, Google struck back with the announcement of Android Pay, PayPal acquired Paydiant, and, soon after the show, Apple announced Apple Watch.

According to a report from Business Insider, mobile payments will make up nearly 15 percent of the total payment volume in the United States by 2019, accounting for $818 billion in transactions. It’s no surprise that some of the biggest mobile/tech companies have entered the game to get a piece of the pie.Let’s take a look at the latest announcements making a big splash in the industry…

Samsung Pay
The announcement of Samsung Pay was one of the biggest revelations at MWC. The industry was eagerly awaiting the official announcement since Samsung revealed that it bought LoopPay in February. The smartphone giant did not disappoint, announcing their two new devices, the S6 and S6 Edge, which both feature their new mobile payments platform!

There are, of course, differences between Samsung Pay and Apple Pay. From our perspective, both show promise in terms of consumer ease-of-use and arming merchants and retailers with an end-to-end payment and customer loyalty strategy. The arrival of major mobile players on the payments scene will no doubt drive the technology’s credibility and hasten consumer adoption.

Android Pay
Google put itself back on the mobile payments map by targeting developers with the announcement of Android Pay. Google executive Sundar Pichai confirmed that this would not be a new product for users, but an “API layer” that enables companies to support secure payments on Android in both physical stores and via apps. Google Wallet will continue to run as a separate service aside from Android Pay, but will rely on the Android Pay open API framework.

Something else we found interesting is that the API framework opens the infrastructure to app developers, who can then brand the payment platform as they choose. This flexibility might help adoption on a large scale for big retailers that want this technology, but also want to stay on brand with colours and logos.

PayPal
After PayPal’s September 2014 announcement that it was breaking away from its parent company, eBay, many wondered what they had in store. Following PayPal’s announcement at MWC that it would acquire Paydiant, we have a much better idea of their plans. Paydiant is a start-up that provides technology to develop NFC-enabled card readers. The company plans to launch in the U.S. by the end of 2015, with premier companies such as Capital One, Subway and MCX (which has over $1 trillion in annual retail sales) already in their repertoire. 

We expect this acquisition will give PayPal immediate access to all of Paydiant’s relationships to speed-up their entrance into the mobile payments world. The success of PayPal will be contingent upon the increasing number of merchants expected to enable NFC, beyond the only 220,000 in the US today.

Apple Watch
Unsurprisingly, Apple didn’t sit back and watch other players enter the arena at MWC. Immediately after the show, they stepped up the competition by bringing Apple Watch top of mind for consumers. The wearable that makes mobile payments as easy as a tap on the wrist is giving a whole new meaning to “ease-of-use.” Consumers will no longer need to search for their phone or credit card to make a payment. The Apple Watch provides an instantaneous experience that today’s consumers have come to expect with all technology. Because of this, we expect a swift adoption rate for the Apple Watch as it meets all of the requirements of today’s consumer inside the store, whether it be getting information on a product, checking in, paying, registering a loyalty card, or receiving/redeeming offers.

Don’t forget to check the blog regularly for more insights from the Proxama team – and if you’re planning on attending TRANSACT 15this month in San Francisco, we’d love to meet up with you! Feel free to contact hello@proxama.com to set up a meeting.

 

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Neil Garner, CEO & Founder, Proxama