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Was 2016 the year of mobile payments?
That's a question we found ourselves asking in the latter part of 2015 and it's a question we've asked ourselves over the last several years: Will [insert year here] be the year for mobile payments?
While 2016 wasn't the year of years for mobile payments, we did have a lot to talk about.
One of the bigger takeaways from 2016 is that banks and retailers want to control mobile experiences, payments included.
This year was one that saw CVS, Kohl's and Wal-Mart launch a payment feature within each of their respective mobile apps.
Chase Pay finally launched more than a year after its initial announcement and Citi Pay came out of nowhere. Visa and MasterCard each announced initiatives to help banks play a larger role in mobile payments.
Banks and retailers have realized they need to be part of the mobile-payments conversation and not leave everything to Android Pay, Apple Pay, Samsung Pay and PayPal. But even those providers made improvements to their products to make them more attractive to consumers.
The following is a collection of the top five features and blogs on Mobile Payments Today in 2016 ranked by pageviews. A couple of these stories address the issues above while one story is a timely one to revisit in the face of Amazon Go.
5. "The problems weighing down mobile payments" — Robert Brodie, co-founder and CTO of Sumo Heavy, examines issues that are preventing mobile payments from really catching on with consumers.
The issues Brodie identifies in this piece are mostly related to the customer experience with mobile payments.
“The first thing all payment system creators must consider is how to make things safe and easy for the user,” he writes.
Brodie suggests an approach such as machine learning provides helps consumers with fraud alerts and helps them to shop smarter based on the payment cards stored in their mobile wallet.
Brodie also addresses the potential for failure with mobile payments systems, tokenization issues and a lack of standards for mobile wallets.
4. "Apple Pay slices the mobile payments market, again" — Robert McHugh, the co-founder of Paydunk, examines how a recent announcement from Apple further fragments the industry.
In this piece, McHugh examines the problems caused by Apple Pay limitations related to web browser payments.
“Users can only use Apple Pay to pay online if they are using an iPhone 6 or later and must own a Mac computer using Apples Safari web browser to complete the purchase,” he writes. “So how does Apple expect to become the top mobile payments solution when the service is only available to such a small segment of the market?”
McHugh believes the fragmentation of the market continues to hold back widespread consumer adoption of mobile payments, and he sees the need for a single universal payment platform.
“Imagine a universal platform that's not tied to a single hardware technology (Bluetooth, NFC, etc.) or manufacturer (Apple, Samsung, Google). Ideally, this platform would have heightened privacy measures and the means to exchange all digital tender types,” he writes.
3. "New York company debuts pure mobile-only grocery checkout" — FutureProof Retail has introduced what it claims is the first start-to-finish, secure self-checkout mobile app.
This story that I wrote in January is especially relevant now that Amazon has introduced its newest retail concept, Amazon Go.
FutureProof Retail developed a white-label mobile app that grocery stores can deploy for self-checkout. Because the app handles the entire shopping process, there's no need for consumers to use a special kiosk to complete their order.
"We think grocery stores are the ideal place to start because everyone needs food and it's where you have repeat shoppers," FutureProof Founder Di Di Chan told Mobile Payments Today at the National Retail Federation's annual Big Show in New York City. "We think once you solve for this issue in grocery stores, you can expand to other shopping verticals [like big-box retail]," she said.
In fact, FutureProof Retail told Mobile Payment Today that since Amazon Go announced its own twist on the retail self-checkout process, it has received more interest in its product.
2. "How will banks address mobile wallets?" — The decision by MasterCard to enable banks to add an in-store payment element to their mobile banking app for NFC-ready Android smartphones has sparked a debate on the role of financial institutions in mobile payments.
As mentioned in the introduction to this list, banks and retailers have both made moves to control the mobile payment experience and take some of the shine off of third-party providers.
When MasterCard introduced the option for banks to add an in-store payment element to their mobile banking app for NFC-ready Android smartphones via a Masterpass API, it rekindled an industry argument about what works best for financial institutions and proximity mobile payments.
Banks today have two options: Go the Chase Pay route with a separate app that sits alongside the mobile banking app; or make NFC-based mobile payments a feature within a mobile banking app.
"In the short term, maybe they sit side-by-side and maybe there's going to be a little bit of redundancy," Daniel Van Dyke, a mobile research specialist at Javelin Strategy & Research, told Mobile Payments Today in an interview. "But long-term, I think the trajectory is an integrated mobile app where purchases at the point of sale are just one function of many within a mobile banking app."
1. "5 trends shaping mobile payments worldwide in 2016" — Euromonitor's Michelle Evans examines the latest trends from her research.
Evans has presented her findings from past research for us and we always get a few good nuggets of information from it:
Topics: ATMs, Bill Payment, Bitcoin, Card Brands, Carriers / Operators, Contactless / NFC, Direct Carrier Billing, EMV, Handsets / Devices, HCE, In-App Payments, Loyalty Programs, Mobile Banking, Mobile/Digital Wallet, Mobile Marketing, Money Transfer / P2P, POS, Regulatory Issues, Restaurants, Retail, Security, Trends / Statistics