Will attachable credit card readers and their companion mobile apps would become the most widely adopted mobile payment technologies in future or the main rival technology, Near-field Communications (NFC)?
Will attachable credit card readers and their companionmobile apps would become the most widely adopted mobilepayment technologies in future or the main rival technology,Near-field Communications (NFC)?According to a recent Mobile payment report from BusinessIntelligence, which examined the main types of mobilepayments, analyzed the state of the mobile payments race,examined the matchup between card readers and near-fieldcommunications (NFC), looked at how traditional banks,credit card companies, and card processors are respondingto the mobile payments threat, and detailed who is furthestalong in developing the all-in-one solution for merchantsand consumers, Credit card readers have better chancesof Winning the battle.
Where things currently stand?Near Field Communica0on, also known as NFC, is a set of standards for smartphones, credit cards, and similar devices, to communicate with similar devices by bringing them close to each other. Nokia , Blackberry, Samsung, MicrosoA, and Google (but not Apple) have all been suppor0ng the technology in their opera0ng systems for over a year and a variety of devices have entered the market with the appropriate equipment in place. Meanwhile, the biggest players in the credit card business (Mastercard, Visa, American Express) and some of the largest banks and payment services in America (Bank of America, Ci0bank, Wells Fargo, HSBC, Paypal) have rolled out some version of technology across their infrastructure. And telecommunica0on companies like AT&T, Verizon, and T-‐mobile have all sworn to oﬀer services in 2010.But s0ll it hasn’t took oﬀ. Meanwhile, companies like LevelUp and Square are increasing their footprints in the phone payment space, reducing the chances that NFC could take oﬀ as a form of payment via mobile phones.
What is current state of Mobile payments?Mobile payments adop8on is s8ll very low: As of year-‐end 2012, only 7.9 million U.S. consumers (less than 90 percent of the total) had adopted a consumer-‐facing NFC-‐compa0ble system like "Google Wallet," or apps that use QR codes or other methods to generate a payment. In-‐store mobile payments are growing quickly: It almost quadrupled last year. eMarketer has es0mated in-‐store mobile payments as adding up to $640 million in transac0on volume in the U.S., up from $170 million in 2011. Though, this ﬁgure does not include swipes on mobile credit card readers like Square and PayPal Here, only consumer-‐side mobile payments.Card readers are really scaling up swi@ly: Squares mobile payments volume rose to $10 billion in 2012, up from $2 billion in 2011. Starbucks is switching its credit and debit card processing to Square, and as of January 2013 accepts the "Square Wallet" app at 7,000 loca0ons. The Starbucks alliance with Square is evidence of how the card reader-‐based approach has already worked its way deep into the U.S. consumer economy.
What is current state of Mobile payments?Mobile commerce is also helping explosive growth of Mobile payments: PayPal processed around $14 billion in mobile payments last year, which conﬁrms the fact that mobile is catching on as a transac0onal plaform. PayPal hopes to build a merchant-‐powered network based on the ubiquity of PayPal as a payment and money transfer plaform. PayPal users are already able to pay at thousands of tradi0onal stores by keying in their mobile number and a PayPal PIN selected online (or in their PayPal app).
ConclusionThough it remains to be seen who will win the bagle, but as one can easily see in the comparison, card readers are currently winning on 4 out of 5 important areas. Credit card readers have gained trac0on because they allow small merchants to easily transform smartphones or tablets into payment registers by agaching a plas0c credit card reader into the devices audio jack, while NFC solu0ons though allow people to pay for products at retail stores by simply waving or tapping an NFC-‐enabled phone at a register, it requires that merchants adopt NFC-‐ready hardware, and that phones carry an NFC chip.Mobile payments future will also be depending on Apple, as the iPhone line has not yet adopted NFC, and only if and when that happens will NFC have a shot at really posing a threat to card readers. Otherwise Credit card readers will further improve their chances of winning the mobile payment bagle
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