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With another Money20/20 conference behind us, it's easy to see where the payments industry is going in 2017 and beyond.
We're no longer discussing the actual payment, but rather, how banks and retailers communicate with consumers before, during and after they use a plastic card or smartphone to pay for goods and services. The payment now is secondary to the overall experience.
That being said, we're not at the point where the consumer's overall experience is a smooth one, and Mobile Payments Today's most-read features and blogs in October reflect the ongoing struggle for the industry to get it "right."
Our most-read article in October was a blog post from Michelle Evans at Euromonitor International. Evans wrote about the top five worldwide trends in mobile payments for 2016, one of which is the mobile-first mindset for consumers.
Another article of note is a contributed article from a executives at Stored Value Solutions about the reasons why consumers continue to mostly ignore proximity mobile payments.
5. "Security or unfamiliarity: What's stopping mobile-payments adoption?" — Security pros discuss how consumers view today's security climate when it comes to payments.
Consumers over the years have shown they enjoy the convenience of digital banking and mobile payments. But, market surveys find time and time again that consumers remain uneasy about the security of their electronic transactions.
That, in turn, has put financial institutions and fintech companies in a quandary: How do they provide products with top-notch security while making it easy for consumers to use things such as mobile wallets and in-app payments?
That was one of many questions one panel at the recent Bank Customer Experience attempted to answer during a discussion about security and simplicity in electronic transactions.
For the panelists who participated in this discussion, they agreed consumers' security concerns might be more about unfamiliarity with certain products more than anything else.
4. "Apple Pay's tenuous role in a cashless society" — Mobile Payments Today Editor Will Hernandez examines Tim Cook's recent comment about a cashless society and mobile payments.
Tim Cook is a smart man.
Once you move past his enthusiastic propaganda at Apple events, it's clear Cook has a great mind. But he’s not always right about everything and I believe his latest comments about a cashless society are worth examining.
Apple Pay changed some things as they relate to mobile payments in the U.S. While systems such as Google Wallet and Isis/Softcard debuted well before Apple Pay in 2014, Apple's vision for mobile payments still hasn't captured the imagination of consumers despite Cook telling us how “great” it is at every company event.
Of course, that hasn't stopped Apple from expanding Apple Pay to more countries. It will debut later this month in Japan, which is considered one of the most mature mobile-payments markets on the planet. And it was there where Cook recently made a prediction about a global cashless society.
"We would like to be a catalyst for taking cash out of the system," Cook said, according to the Nikkei Asian Review. "We don't think the consumer particularly likes cash."
3. "What do consumers know about their phones? Not enough to leave their wallets at home" — A couple of executives from Stored Value Solutions offer answers to the mobile wallet consumer adoption problem.
There's a smartphone epidemic. So many people have them, and they are so engrossing, that smartphone users literally bump into each other when crossing the street or passing each other on a set of stairs. They're communicating, they're gaming, they're researching and locating, they're checking the weather, they're shopping, they're daydreaming, they're doing everything with their enthralling phones… except paying. Or making eye contact.
What is the holdup in adopting mobile wallets? To be fair, a respectable 35 million consumers—22-plus percent of all smartphone owners—have gone so far as to provision a credit or debit card into a general purpose mobile wallet for use—maybe not for regular use, but at least they've tried it.
There's been a ream of articles written about what it would take to get mobile wallets into wide adoption—and each article eloquently offers one piece of the puzzle. We'd like to posit that what it's going to take to get the mobile wallet to replace the tattered leather one in your back pocket is… when everything that's in your wallet is in your phone, and more. And everyone accepts that as reality.
2. "EMV in the US: One year later, and it's not pretty" — Andrey Tikhonov, senior director of payment technology of Infinite Peripherals, reviews what the industry has witnessed with this much-discussed transition and what he believes will happen next year.
With the one-year anniversary of the EMV liability shift in the U.S. upon us, we see that progress is evident, but issues regarding implementation, chargebacks and transaction times remain. These issues will most likely continue into 2017. EMV deployment was never predicted to be simple and was one of the biggest changes of the U.S. payments system in the past 50 years.
The transition is continuing more slowly than originally predicted, and with that comes good news and complications.
Approximately 80 percent of U.S. consumers have chip cards; 30-to-40 percent of all U.S. merchants have active EMV locations and about 5 million EMV-ready devices have been deployed to stores. Additionally, counterfeit fraud has decreased by 60 percent since the liability shift, according to Mastercard.
1. "5 trends shaping mobile payments worldwide in 2016" — Michelle Evans, the digital consumer manager for Euromonitor International, shares some findings from the company's latest global research.
In 2016, mobile-driven commerce will reach an estimated US$972.25 billion across the 46 markets where Euromonitor International conducts this digital research.
Most impressively, mobile payments are expected to reach US$3 trillion by 2021. While that is a lot of transacted money across these small-screen devices, mobile-based payments will equate to only an estimated 11 percent of all consumer card payment volume across these markets in 2021, up from approximately 5 percent in 2016.
As mobile phones cement themselves as the most popular device on the planet and mobile-based commerce continues to expand leaps and bounds, the market potential in the next 10 to 20 years remains enormous. The stakes are certainly high for payment players, merchants and brands, which are all fighting to be among the first to get mobile right and gain significant adoption among an increasingly more connected consumer base.