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Who is gaining traction in the mobile payment industry?

James A. Martin | July 15, 2015
The first credit card, dubbed "Charg-It", was introduced in 1946. It took another 13 years for the first plastic credit card to arrive on the scene when in 1959 American Express introduced the first card made of plastic. Adoption of new technology takes time, especially when it comes to separating people from their money but we are starting to see traction in this space.


PayPal has made several moves lately to bolster its mobile payments presence. In March, PayPal announced its acquisition of Paydiant, a startup platform that big retailers use to create branded mobile wallet apps. Paydiant enables consumers to make retail purchases via NFC or QR code.

PayPal is also releasing an NFC credit card reader. And on July 2, the company announced it had acquired Xoom Corp., considered among the top international payment companies, for $890 million.


Facebook has rolled out a payments feature to Messenger, enabling FB friends to send each other money via the app and a linked debit card. Messenger payments will compete with Google Wallet, Square, potentially Apple Pay, and Snapchat, which uses Square as its peer-to-peer payment platform.  


Samsung Pay, announced in March, is said to be set for a September launch in the U.S. and Korea. Along with NFC, Samsung Pay will use a technology called Magnetic Secure Transmission (MST) to beam credit-card info to card readers. With MST, Samsung Pay will reportedly work on 90 percent of existing payment terminals in the U.S.; Apple Pay and Android Pay can interact with NFC-only systems, which are still a minority. 

There's some uncertainty about what the folks in Redmond, Wash. are planning re: mobile payments. But it appears Microsoft "is looking to go up against Android Pay, Apple Pay and...Samsung Pay," notes Mobile Payments Today, providing a tap-to-pay' feature in Windows 10 mobile devices. Further, Microsoft may use dongles such as those from PayPal and Square to accept payments from any platform that uses a Windows-based backend system.

Mobile Payment Challenges

Despite all this activity, the mobile payments sector has some hoops to jump through before it gains global, mainstream traction. They include:

* An awareness deficit. According to a December 2014 study by Wakefield Research/Verifone, half of U.S. Internet users weren't familiar with mobile payment technologies. The more mobile devices that support contactless payments, of course, the greater awareness will be.

* Security concerns. Fifty-six percent of consumers don't want to store sensitive information, such as credit-card details, on their smartphones, according to a Feb. 2015 Harris Poll. But remember: consumers worried about security were slow to bank and buy during the Web's early days.

* Competing technologies. Enterprises face a variety of mobile payment technologies to support, along with more traditional payment forms (such as credit and debit cards).

Bottom line: As with any growing industry, some mobile payment players will achieve and maintain traction, others will lose or never get it. Consumers will become less worried about security and be swayed by the ease and benefits of mobile payments.


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