The latest news on mobile payments shows that the big banks are wanting in on the mobile wallet race, but are they already too far back in the pack? Meanwhile, Samsung is tackling the African market ahead of Apple and Android, and Google announces a way to avoid app downloads. Here’s the latest news on the mobile + payments + commerce front.
Miami Transportation To Offer Mobile Payments
Taking a page out of the copy book of the London Tube, where contactless payments have skyrocketed, the Miami-Dade County’s Department of Transportation and Public Works has signed a $33 million contract with Cubic Transportation Systems to install contactless and mobile payments. The Department of Transportation will use the back-end support of Cubic Transportation and, in collaboration with Passport, will change the EASY Card revenue management system to allow travelers to buy fares using contactless, check balances on the cards, view account history and manage accounts through a new app.
Passport has designed similar mobile applications for the transportation systems in Chicago, Toronto and Boston. Riders with NFC-enabled mobile phones will be able to download the EASY Card, and for those without NFC-enabled phones, the app will provide a display-generated ticket and one with a bar code. The rollout will be completed in the next 18 months.
Millennials Eschew Bank Mobile Wallets
The millennial generation has already shown its love for all things mobile, but big financial institution mobile wallets were not in the mix, begging the question: Are the banks too late off the mark to deliver mobile wallets to this generation?
A study by CCG Catalyst Consulting Group, “Millennials and Mobile Wallets,” examined millennials and non-millennials and used the similarities as a base point for predicting the future of mobile wallets and payment brand acceptance. The study found that both millennials and non-millennials want to use mobile to manage finances, and cash is becoming less important to both groups. But the similarities end there.
Millennials have been practically handed a smartphone as they emerged into the neonatal world and have grown up with touch technology. The lives of this generation would practically implode without smartphone technology that incorporates the social, financial and practical facets of daily life. The banks might be able to snag the less tech-dependent non-millennials, but they might struggle where the Gen Y and Gen X generations are concerned, 93.9 percent of whom own and love the additional benefits of a smartphone mobile app for banking purposes.
Samsung May Beat Android Pay And Apple Pay In Tapping The African Market
Hot on the heels of M-Pesa, Samsung plans to initiate payment services in South Africa in the first quarter of 2017. The company may well beat out Android Pay and Apple Pay in grabbing market share in a country that is arguably already a leader in the mobile payments game.
This will be the 10th country to accept Samsung Pay, and the negotiations with banks have not been easy or fast. According to Craige Fleischer, Samsung’s director for integrated mobility in South Africa: “We are quite far down the line talking to local banks. Unfortunately, these things take time. There is an enormous amount of integration that has to happen in terms of switching and tokenization, both MST and NFC tokenization.”
Fleischer has negotiated with many banks, not just the main financial institutions. He believes that a successful launch “needs coverage of at least 65–70 percent, not only in terms of point-of-sale infrastructure but also bank customers that are able to access the payment service.”
At least in Africa, the success with other mobile applications shows that the consumer is ready for the payment technology, since there are enormous frictions to solve and mobile is the ubiquitous infrastructure that everyone has access to.
Google Announces Android Instant Apps
Could the app industry be at the perilous cliff edge of the maturity curve? We’ve written extensively about the fact that the number of apps that consumers download monthly is about zero and the number that they use regularly doesn’t require both hands to count. Chatbots are viewed as the developers’ answer to consumer frustration, but they’re just another layer in between the user and the brand, becoming just another tech feature to help the user fix another tech feature.
Google’s solution to this "apps without a purpose" problem is Android Instant Apps, which allow consumers to access portions of an app by streaming and without downloading the whole thing. By clicking on a link, the user can do what they need to with no time wasted.
Google says that app streaming could potentially affect many industries and sectors, not just payments. But the payments industry would benefit greatly by overcoming a major roadblock in consumer adoption — security concerns. With no need for credentials to be loaded on a smartphone, that’s one less opportunity for fraudsters to grab consumer data.
Streaming might also solve the problem of needing a particular device for a particular mobile payment service. Any service could be streamed to complete a payment, with no need to use up data with unnecessary downloads. A study by RetailMeNot found that shoppers don’t want to download an app for something as transient as shopping. Only 60 percent of consumers who shop online using a smartphone have fewer than two retailer apps on their phone and around 20 percent don’t have any at all.
App streaming could still provide in-store rewards and coupons as the shopper moves from store to store. If the consumer really is sick of downloading apps and this is indeed a friction that could be eliminated by streaming, this might herald a sea change in the payments sector.
P2P Goes Real Time
It seems as though the real-time rails for payments have been sitting underneath our noses all along. Both Visa and Mastercard have signed agreements with a host of players to enable the real-time and ubiquitous movement of funds from senders to receivers across a variety of use cases. Early Warning is one such partner, who will see its clearXchange P2P network benefit by enabling access to receivers in and outside of the network via a debit card issued by Visa and/or Mastercard issuers. Visa has set its sights on capturing the $9 trillion non-P2P disbursement opportunity — namely, payments between businesses and people and between governments and people. It is also powering non-tech players, like PayPal, Square and Ingo Money.