The Obstacles Facing Mobile Payments

Paying With Your Smartphone: Smartphones have been providing new ways for technology to improve upon the daily lives of everyone who has them. Navigation, video conference, Internet and a bevy of apps for just about anything has proven a smartphone to be useful. Even mobile payments are possible, given that the consumer has an application capable of doing so. There is a lot of promise in this field, but there are several obstacles it must pass before consumers adopt it as one of the standard ways to pay.

Why Consumers Have Not Fully Adopted Its Use

The ability to make payments with a smartphone has been available for years. For example, think of consumers that use Speedpass at the pump. Many smartphones come with the same type of technology. Specifically, it uses a hardware-based technology called near-field communications, and it allows the smartphone to transmit a small amount of information over a short distance to complete transactions. It may seem convenient, but the consumer must have an NFC-capable smartphone, the correct app and be near the specific terminal capable of making a mobile payment. This can be too much of a hassle when consumers are used to pulling out their cash or credit card to make a quick transaction.

Are Companies In Or Out?

Apple, the company responsible for the world’s best-selling iPhones, is one of several main carriers that do not support NFC. It is speculated that Apple is hesitant to enter the mobile payment market until it becomes less of a hassle for consumers. Even so, Samsung and HTC do support NFC into their smartphones. A few examples are the Samsung Galaxy Nexus and HTC One. In turn, they support apps such as Google Wallet and Square, that allow users to pay with their phones seamlessly. Small business and entrepreneurs are also benefiting from this technology. An example is a company called LevelUp, which rewards its users with incentives and coupons when they pay with their smartphones at participating locations. But until the larger smartphone businesses widely adopt its use, finding these terminals at all of a user’s favorite stores may take some time.

The Biggest Issue Going Forward

Mobile payments are still considered a new technology, which means that the market is very competitive and not yet standardized in the business. Banks and third-party developers have not agreed on what specific technology is the best fit for the market, even though NFC is becoming popular among its users. This is the main cause of the mobile payment market slowing down, and it’s a big one if companies are not in agreement with each other. NFC is often used, but there aren’t enough smartphones in the market that use this technology for companies to be convinced just yet. Since mobile payment usage is expected to rise, in time there will be a consensus as the market grows along with its consumers.

The Future of Mobile Payments

The outlook is bright since transactions are expected to grow up to 700 million in 2013, according to Javelin Research. Consumers are demanding its use, and there will be a point when mobile payments become a huge business going forward. Until then, consumers will be limited at where they can use their smartphone for payments.

Author Bio: This article was provided by Joe Restivo, editor and contributor of InternetPaymentServices.net and iPayX.com.