Have you heard? 2014 is the year mobile payments is going to take off. Gartner thinks so, ABI predicts a strong year, and even Bain & Co. thinks the mobile-payments explosion is just over the horizon.
Unfortunately, it seems consumers haven’t yet gotten the memo. Mobile use is growing, particularly among eCommerce-savvy Millennials, according to a new report released by the U.S. Federal Reserve. Certain already-powerful players – PayPal and Starbucks for example – are steadily recruiting users. But it isn’t exactly a craze sweeping the nation.
According to the Fed, about half of all mobile phone users surveyed weren’t all that interested in ever using their phone to pay for anything, even if it were offered universally. Of those mobile-naysayers, 63 percent reported that presently payment available methods were just as easy, and 73 percent noted seeing no clear benefit to using mobile.
Providing that clear benefit could be where mobile-payment providers start winning the hearts and minds of the American consumer, and it is where mPay leader PayPal is committed to pushing the market.
PYMNTS.com caught up with PayPal’s Don Kingsborough as he was coming off co-chairing the Breaking the Plastic Habit panel at Innovation Project 2014. Kingsborough is head of global retail business and corporate development for PayPal, and he thinks there is now actually good reason to believe that mobile is going mainstream.
He notes that, while it is easy to get lost in the minutiae of customer behavior and the frantic technology race, the IP panel discussion reminded him that providing a useful solution to consumers is the essential common goal.
(Jump to: 0:27)“You should go back to basics sometimes and not get caught up in the daily hectic pace that you have. It was a reminder to me that there is a method to the madness and we should remind ourselves of that.”
Kingsborough thinks the mobile ecosystem has progressed to the point that it can start delivering on a unique value for consumers. He further noted that while there were many different view expressed on the panel about the specifics of how the industry should move forward, from hardware-software hybrid mPay systems like Loop, to targeted reward applications like Trial Pay – there was also a surprising amount of commonality of vision.
(Jump to: 1:10) “There are these common themes that everyone did agree on, and so I do see really a much more straightforward path that will lead this industry in a similar way.”
Within the next 12 months, PayPal’s mWallet paired with Beacon technology will offer a vastly expanded suit of in-store services that will theoretically make it possible for customers to use their phones to pay for goods and services without ever even having to reach for the device itself.
Kingsborough, however, says the future of mPayments is bigger than just changing how people pay and instead needs to key into changing the shopping experience as a whole.
(Jump to: 2:38) “It allows you to really customize service. You get to really get to know who the customer is, you can help them in unique ways. If they are one of your best customers, you might be able to give them things that you might not give to someone walking in for the first time, so you’re able to differentiate.”
Kingsborough also noted that while the technology is important, he believes that the future of adoption depends on it being consumer need driven.
(Jump to 3.31) “From our standpoint, you have to enable the technology and then you have to have the consumer be able to personalize the applications or the services that they want. So you have this base technology that then allows consumers to do what is important to each consumer individually.”
Kingsborough co-chaired Breaking the Plastic Habit with New York Times columnist and disruptive change enthusiast Charles Duhigg. You can read and listen to the PYMNTS.com interview with him from IP later this week.
To read more about mobile payments and whether the time has finally come for America to begin its national love affair with them, check out MPD CEO Karen Webster’s Commentary this week: Mirror, Mirror, On the Wall…
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