Mobile pay apps allow users to bypass the cash, credit and debit system to pay for goods and services with a ‘wallet’ per se on their mobile phone.
With the continual growth of technology integration, mobile payment solutions are making transactions seamless. Capgemini reported that “most of the innovations have altered the customer-facing processes, while they have not impacted the underlying infrastructure.” The demand is high as the usage of apps for everyday services such as Uber grows. In-app payments make operating these app services easier for both the company and the user.
Key drivers of the supply structure include advancements in hardware such as point-of-sale units and wearable technology. Drivers of the adoption of this technology include exponential rise of mobile app digital wallet usage.
Capgemini reports that the mobile payment segment is expected to grow at a compound annual growth rate (CAGR) of 23.2% through 2020. Leading the pack are innovators such as Apple Pay, Pingit and SamsungPay.
A mobile payment subsidiary of Apple for iPhone users
Mobile payment subsidiary of Barclays Bank to send and receive money using a mobile phone number
A mobile payment subsidiary of Samsung for Samsung owners
“Despite the negative forecasts, ApplePay still leads ahead of SamsungPay, and AndroidPay with 12million users.” –Tim Cook
ApplePay, a new technology by Apple, is paving the way for new standards in financial transactions and bringing the company in direct competition with Paypal. ApplePay leads ahead of SamsungPay, and AndroidPay with 12million users and growing at 1million users per week according to Tim Cook on a quarterly earnings call to investors.
Accepted in 2.5million locations in the US alone, ApplePay has expanded its technology to China to hedge against slower adoption. Slowed adoption is seemingly caused by the 16% dip in sales of the iPhone. However, new partnerships may unfold new ways for ApplePay to gain market share. Among the many partnerships in sight, Forbes magazine reported that ApplePay will be integrated with Bank of America and Wells Fargo to allow withdrawals, check balances, and transfer funds. This feat has become active in a few locations at the beginning of 2016 and will slowly eliminate the need for plastic cards. Despite looming predictions, 2016 has been a year of growth and new partnerships.
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“BBM delivers real convenience for our customers sending or receiving money through the Pingit app. Customers want to be able to make payments quickly , easily and safely, and by creating the option for funds to be transferred from within BBM conversations, we’re allowing Pingit to make the payments process simpler for even more people.” –Darren Foulds, Managing Director for Pingit at Barclays.
Launched in 2012, PingIt is the first mobile-to-mobile payment service in the United Kingdom. Unlike the mobile payment services created by tech companies including ApplyPay, SamsungPay and even AndroidPay, Pingit is a service of the financial institution Barclays Bank.
Not without partnerships of its own, PingIt partnered with Blackberry Mobile, the only OS without a mobile payment partnership until the first quarter of 2016) to allow instant money transfers using BBM.
Seeing the opportunity in emerging markets as well as the fact that 6% of its profits come from African retail according to the Financial Times, PingIt has services in both Europe and Africa.
With more than 2.9million registered users and 68,000 businesses according to Blackberry, more than £2 billion has been transferred using the app to date. This feat is in part due to the fact that a user does not have to be a Barclays customer to use the service.
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“Samsung Pay works with almost any card terminal from day one and Galaxy owners can shop with a wallet they never knew was always in their hands,” Injong Rhee, EVP of Samsung Electronics, Global Head of Samsung Pay.
Founded in 1969, this South Korean hardware electronics company has grown to be a formidable competitor in the mobile technology space. Now, with SamsungPay, they are the chief competitor to ApplePay. Unlike PingIt, which is compatible with all devices, both ApplePay and SamsungPay are only compatible with their respective systems. Each with its accomplishments, SamsungPay can boast being the most widely accepted payment system with about $5million users and 68,000 businesses according to Samsung themselves.
Their largest markets are South Korea and the United States with additional launches in Spain, Singapore and Australia. It has processed more than $1billion in transactions in South Korea alone since its 2015 launch.
Future growth trends include acceptance of gift cards, transit passes as well as membership and loyalty cards.