Restrictive Systems Holding Back Mobile Payments



By 2015 it is estimated that mobile payments will be worth more than $1 trillion. Is this nothing more than a pipe dream though? There are now concerns that closed and restrictive payments systems are hindering the growth of the mobile payment industry.

Today, there are approximately 6 billion mobile users worldwide; making the cell phone the one device most people carry with them everywhere. With statistics like these, it’s only logical that mobile payments would be the next step forward from carrying money or credit cards. The reality is though, that many of the companies innovating mobile payments are focusing on apps or near field communication (NFC) enabled devices, innovations that would only reach approximately 25% of mobile users – those with smartphones. The other 75% of users are still using devices that don’t have such capabilities.

Meeting the Trillion Dollar Ideal

While those companies already innovating in the market to provide mobile payments should be praised for their forward thinking, there is a large gap opening up for someone to fill, but how can they?

M-Pesa, a mobile payment service run by Safaricom in Kenya, has become the most developed and widely used mobile payment system in the developing world. Much of its success is due to the ease of the service as it uses simple text messages.

Some believe that the simplicity of using text messages as M-Pesa does is the direction we should be looking to. All phones these days are text capable and will bring about a utopia for mobile payment systems – no fragmentation and no possibility of trying to buy something at your local store, but not having the correct app on your phone, or simply not having a NFC capable phone.

It’s clear that a new age for mobile payments are coming as more companies are indicating an interest in the area, but only time will tell which way the technology is likely to progress and just how it will aid or hinder people on a global basis.

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