Why Banks Move Slow on Mobile Payments—and Why They Shouldn’t
If you’re too young to remember the first internet shopping revolution, it went like this: a few startups (Amazon, eBay, Pets.com) made it possible to buy stuff at home with a desktop computer and a credit card.
The tech was implemented pretty quickly, it was easy to use for the end consumer, and was soon widely available to anyone just about anywhere.
The second internet shopping revolution—namely, the growth of mobile payments into the real world—is having the exact opposite trajectory.
Instead of easy, overnight implementation, we’re getting a slow stream of new solutions that confuses consumers more than excites them; we’re also getting a lot of hesitation from retailers, who want to avoid already established solutions and develop their own.
This is partly why Business Insider has downgraded their expectations for mobile payment growth in the future. They still see huge consumer adoption—but not until 2019.
The tech is already here, but putting the tech to work is not happening as fast as it did the first time.
From a retailer’s perspective, this isn’t a problem. They have time to wait. The tech companies can wait, too; the mobile phone market is effectively a duopoly between Google and Apple, and even if you consider Samsung a big smartphone player, there’s just too little room for bottom-up innovation with massive gatekeepers in the way.
Banks, too, are in no rush to implement mobile payments. After all, it’s a costly extra service they need to implement, and there’s a risk that a company like Apple follows Alibaba’s lead and starts its own bank, thus taking a bigger piece of the banks’ pie. Besides, consumers aren’t demanding mobile payments now, so they can wait, right?
According to a new survey, that’s wrong.
Mobile payment provider Zapp told NFC World that nearly half of UK consumers would “switch bank accounts to access mobile payments if their current bank is unable or has no plans to offer the service.”
Of course saying you would switch and actually switching are two very different things. But if nothing else, this survey suggests that consumer demand for mobile payments is a lot stronger than the old players realize, and they better step up and take notice—unless they want a potential mass exodus of customers, that is.