Earlier this week I read that McDonald’s was trialing mobile payments in
two of their stores in the US. In
effect, customers will be able to pay for their Happy Meals using just their
mobile phone! I wonder was this intended when the term Digital Wallet was first
conceived - a seamless, easy way to remove the need for a physical wallet by
paying for everything using a mobile.
In the UK, there have certainly been advances towards a world where this
McDonald’s example is the norm.
According to the UK Office of National Statistics, access to the
Internet using a mobile phone more than doubled between 2010 and 2013, from 24%
to 53% and so far in 2013, 72% of all adults have bought goods or services
online.
However, another survey, carried out in January by UK-based ICM Research
showed that consumer awareness of mobile payment methods was high - 80% but
only 8% of people were actually making contactless transactions. ICM surveyed over 2,000 consumers in
the UK and found that, despite smartphone
penetration around 60%, only a third would 'definitely' or 'probably' use their
mobile to make payments, use as event tickets or to collect vouchers. Looking at just the smartphone owners'
answers that figure rises to 46%.
So we know that consumers’ buying behaviour is perfectly suited to all
the new technologies available but something isn’t resonating with them.
Let’s take a look at what’s out there. PayPal and Google
have already entered this market
with their mobile offerings but adoption is still a long way from mainstream in
both cases. PayPal has a
well-entrenched network especially with its eBay connection. It has also been around for a long time
and enjoys a larger user base.
According to Play, Google’s app store, Google Wallet has been downloaded
fewer than 10 million times in the two years since its launch.
V.me, Visa Europe's answer
to PayPal and Google Wallet, allows consumers to store details of several cards
in their own digital wallet, which can then be used for mobile payments. The service will be available in the UK
from the end of 2013 and has already announced a deal with Dixons Retail
allowing customers to purchases on the Currys and PC World websites using the
V.me service.
Stripe, an online and mobile payments startup, recently
launched operations in the UK. It
enables UK merchants and vendors to accept online payments, no PayPal required
- effectively providing a rival service to PayPal and Visa.
Their service
eliminates the need for UK businesses to go through time-consuming compliance
and accounts set-ups to facilitate online payments. It can accept all major
card types including Visa, MasterCard and American Express and the start-up has
also launched multiple currencies to support its UK extension letting
businesses charge in US dollars, British pound sterling and Euros.
Meanwhile a group of
UK banks, including Barclays, RBS, Lloyds, HSBC and Santander have come
together to launch Zapp, a new
mobile phone payment app. Unlike some existing
apps, it’s not tied to one particular bank and it comes pre-installed rather
than requiring a separate download.
Once a customer has logged into
mobile banking app on their phone, according to Zapp, the transaction can be
completed with a tap of the finger in as little as 12 seconds.
Also keen to move into the e- and m-commerce space, Facebook is planning to test a new mobile
payment feature. It will use payment details added by
users to their Facebook account to automatically fill in forms when they make
purchases on mobile applications. A clever move
as this will help to convince advertisers of the effectiveness of its platform
in driving revenue.
To date, no third-party wallet provider has won large-scale
adoption in the UK market and I suspect wont for a good while to come yet. With
all these new collaborations and app releases, it will be interesting to see
how well UK consumers embrace the mobile wallet in the months and years to
come. Indeed it will also be interesting to see which of the many developments
will actually ever recoup their start up costs!
Sources:
-UK National Statistics 2013
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