- Increased competition to accelerate replacement of cash and debit cards
- 52% of current smartphone users ready to switch to m-payments
Dublin, October 24, 2012 – New Internet companies are now serious challengers to financial institutions and telcos for a slice of the mobile payments market, according to the latest analysis from the BearingPoint Institute, “Who will be the winners in the mobile payments battle?”. Industry research organisation Gartner believes that mobile transactions will reach a volume of $617 billion by 2016.
The study finds that after promising much and delivering little for the best part of a decade, mobile payments technologies are poised to come of age. 52% of current smartphone users are ready to switch to m-payments although those aged over 55 are much less inclined.
Increased competition and the rise of powerful smartphones are likely to accelerate the move towards the replacement of cash, debit cards and other forms of payment with software based approaches running on mobile devices.
“The European mobile payment market landscape is experiencing revolutionary change as new players and technologies appear on the scene,” commented Martin McKenna, head of financial services practice, BearingPoint Ireland.
“Everyone says that mobile payments are the future, but up to now it has remained tantalisingly out of reach. Ultimately consumers voting with their thumbs will determine the evolution of the mobile payments market,” said Christian Bruck, Partner at BearingPoint in charge of mobile payments consulting and co-author of the report.
He added that the main issue standing in the way is trust. With ailing trust of consumers in traditional financial institutions new players now have a real opportunity to displace banks in the mobile payments arena. With telcos wounded by falling revenues and commoditisation of their product, leading logistic companies with a strong and reliable brand and internet players have the mass and means to truly disrupt the payments market.
Christian Bruck says: “This is a battle of competing eco-systems. Traditional financial institutions, telcos, leading logistic companies and internet players are each vying to become a dominant player in this market. While the new players have everything to gain, banks really do have it all to lose and ignoring customer sentiment and behaviours could be a critical mistake.”