How mobile payments are shaping the future of e-commerce

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Mobile payment transaction volume is growing so exponentially, it’s difficult to ignore. Just like Paypal facilitated ease of use for consumers in the early days of e-commerce via desktop, our hunger for online shopping knows no bounds – but what is the consumer driver, is it the choice or need for the products and prices available, or is it the usability factor, and the simple ability to pay for products within seconds at the swipe of a thumb?

The fact is, mobile payments are not just shaping the future of e-commerce – they are driving it.

Abandoned Cart’ syndrome becomes so much less of an issue when you’ve checked out in record time from your ‘phone or tablet – at the traffic lights (not recommended), playing Mum or Dad’s taxi service or anywhere else you find yourself sat quietly with your smartphone and not much to do.

Consumers are not simply more comfortable with paying online for products and services via credit or debit cards, but increasingly comfortable using their mobile devices to pay, cutting out the card altogether. The number of mobile payment transactions is forecasted to near 50 billion in 2015. Contactless mobile payment transactions and mobile wallets are expected to be the leading segments in terms of market growth.

In the Middle East and Africa, the share of mobile payments in B2C E-Commerce is the highest in recent years, boosted by low financial services penetration in contrast to fast spreading mobile phone penetration. In Kenya, (home of M-Pesa mobile payment and transfer solution) there were over 25 million subscribers to mobile payment services in 2014, more than 50% of the country’s total population. Europe showed varied points of contactless mobile payment acceptance in retail as well as variation in preference in mobile commerce, such as cards, transfers and wallet services.

A mobile payment occurs when a transaction is carried out via a mobile, internet enabled device, replacing a physical credit card transaction. Mobile transactions are a larger category that includes these payments, but also includes mobile commerce, or e-commerce channeled by an app or mobile website (e.g., Amazon’s iPhone app).

Interestingly, mobile payments are on the up in physical stores also, with tablets and smartphones powering card-based transactions through apps, ‘scannable’ QR codes, and attachable card readers that transform devices into cash registers.

Security concerns abound and rightly so – even from the headache of the kids and their ‘ in app purchases’ through to full on fraud and theft, consumers are worried about the loss of personal data as much as their cash – these concerns are global, and transcend nationalities as the number one issue with the rise of mobile payments.

And the lines are blurring from consumer through to corporate

Change is afoot with the emergence of Apple Pay, a digital wallet that links your payment cards to your phone, allowing you to use your iPhone or Apple Watch to pay for things. It will also make it easier to make payments within apps.

This is considered by experts to be one of the most important developments with regards to the convergence of e- and m-payments in the US right now.

Paypal last month revealed that it is building up to a full suite of services for consumers and merchants alike, offering an “operating system for digital commerce,” according to PayPal president and CEO “designee” Dan Schulman.

“We’re coming into the market at a time when the financial services industry is going through some fundamental shifts,” observed Schulman during a media event, themedCommerce: Rewired,

Schulman suggests this rate is driven by two main factors: the mass adoption of mobile and the blurred lines between online and offline commerce.

PayPal saw more than one billion transactions during the first quarter of 2015 – one out of three of which derived from a mobile device.

As a result, Schulman continued, online commerce is being replaced by mobile, then in-app experiences and then “in-store,”

Users of Pinterest will soon be able to buy items directly through the company’s app using a new type of pin.

Pinterest and Canadian e-commerce company Shopify said that the “buyable pins” will debut in the next few weeks.

At digital SPS, we have always believed that the maturity of any online interaction and marketing will always full circle back to the individual and ‘ real life’ connections, transactions and relationships. We are not replaced by robots, yet, and nature dictates that social interactions drive us a species – Social media can be accused of acting as the direct opposite, but when technology can facilitate every day transactions, interactions and generally make life easier for us humans, – surely that’s the holy grail?

Consumers want Convenience, Security and the opportunity to utilize in as many places as possible – with the in mind, there is no turning back for the whole new world of ‘ e pay’ – which ironically, can bridge the gap between e –commerce and bricks and mortar retail space.

 The writer, Olivier Sauser, is an advisor on strategy and new technologies at Digital SPS, a Dubai based digital marketing consultancy.

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