A New Definition for ‘Mobile Payments’

 In Mobile Industry, Mobile Payment, Order Ahead, POS & Mobile Payments

Traditionally, when the industry talks about mobile payments they are referring to the ability for someone to use their phone to complete a purchase. We’ve all heard the predictions over the last several years claiming that mobile wallets on smartphones will soon outpace the use of physical, plastic cards (or cash) as the most popular tender method.

As we near the last quarter of 2016, however, we still aren’t seeing that widespread growth that experts have been predicting for years. According to Jim Daly of Digital Transactions and First Annapolis Consulting, “…only 23% of [survey respondents] reported having made in-store payments with their phones.” That is up from the 16% reported in that same survey in 2015, but not the kind of growth everyone was expecting, especially given the prominence of Apple Pay, Android Pay and Samsung Pay (among other wallet and loyalty applications).

In that same survey, however, “74% of mobile-phone-using consumers reported that they had made a mobile payment in the preceding 12 months versus only 40% in 2015.”

So what gives? Where is that large increase coming from if it isn’t in-store? Over the last year, the industry has seen a considerable increase in in-app and person-to-person payments. With in-app payments, consumers are essentially making purchases before even going into the store, or not even going in at all (i.e. Amazon). One example of in-app purchases is the online ordering functionality you see in popular coffee and sandwich shop chains.

Using our phones to make purchases will continue to grow, but the method by which we are making these payments is what will continue to evolve. Ten years ago, mobile payments referred to the digital/mobile wallet and the merchant’s ability to accept these payments. Five years ago, it became popular for businesses to use mobile devices to accept payments. Now, we’re seeing a marriage between the two: in-app payments allow consumers and businesses, alike, to accept payment and make a payment using mobile technologies. So when we talk about Mobile Payments, let’s be clear – it’s a mobile commerce ecosystem that will continue to evolve.

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