The Mobile Payments market is going to take some time to evolve, but here are some of the major trends we’re seeing.
1.
The iPhone’s dominance is fading.
We’re no longer seeing large amounts of spending by consumers in mobile payments.
Apple’s mobile payment business has more than doubled over the past three years, to more than $2.8 trillion, according to research firm IHS.
In 2018, Apple accounted for $2 billion of mobile payments volume, or a share of the market that’s about 50% larger than in 2015, according the research firm.
“The iPhone is clearly not the dominant payment provider in the market, and in fact is not even close,” Jefferies analyst Mark Weisbrot wrote in a note to investors.
But, he noted, “it is now the dominant provider in many countries around the world.”
2.
Mobile payments will only grow faster than payments in the bank.
The most important reason that banks and payment companies are making mobile payments more expensive is because they have to make sure that all of the fees they charge for transactions are covered by fees for other types of payments.
Banks have to pay fees for credit card transactions, for example, or to process transactions for payments made by other types.
But they’re also charged fees for debit card transactions as well, and those fees often aren’t included in the transaction costs.
That makes it easier for merchants to charge a premium to the banks for transactions that are covered in a transaction fee, and to charge fees to customers who do not have bank accounts.
Banks can do this because of the fact that they are generally able to lower transaction fees for smaller amounts of transactions, and because they often have more customer-friendly card-accepting technologies.
That means the fees can be spread across more customers and therefore increase overall consumer spending.
The other major reason banks are charging higher fees is that they want to ensure that customers can easily switch from a bank to a mobile payment provider, which makes it harder for customers to switch banks if they want a better deal.
3.
Mobile payment integration is going faster than ever.
The first time a consumer tries to pay for an item using a mobile device, they’re usually directed to a merchant’s website.
This can be frustrating and annoying, as a customer might have to wait for an entire day for their money to be transferred.
That’s why companies like PayPal and Apple Pay are so popular.
“There is a large number of consumers that are looking for quick and convenient payment solutions and they’re looking for an easy way to do that,” Weisbart wrote.
“PayPal is the most common payment solution for the average consumer, but it’s a relatively new technology and is still in its infancy.”
4.
Payments are increasingly being made using credit cards.
The number of credit cards issued worldwide has tripled in the past year, according at least one financial services company.
And in the U.S., the number of people using credit or debit cards has increased by about 2% per year over the last decade, according data from the Consumer Finance Research Institute.
That growth is largely due to the rise of the mobile payment market, which has created a new type of credit card that’s accepted in the payments ecosystem.
5.
The average consumer is going mobile.
We’ve all seen people who spend hours online trying to get a product to work, and that’s an understandable strategy for a company to take.
But in the long run, a user might also be tempted to skip the checkout and just pay for the item.
That could lead to a lot of frustration for the consumer.
Weisbert wrote that this strategy is also likely to continue to drive growth for mobile payments in 2019 and 2020.
For example, Apple Pay is going from being used by only a small number of users to being the dominant mobile payment solution, and the company is currently launching the Apple Pay App for Android and iOS devices.
We could see this strategy continue to grow as mobile payments grow in popularity, and as consumers increasingly turn to other payment options to make payments.
But at this point, it’s difficult to tell if that strategy is sustainable.
“We’re seeing consumers and merchants using more mobile payments options, including Apple Pay, as consumers have more choices,” Weiser wrote.
