Mobile Payments in 2015: Another Growth Year

Mobile Payments will grow in a faster way in 2015, essentially for three reasons.

Mobile Payments will grow in a faster way in 2015, essentially for three reasons:

  • The launch of mobile wallets.
  • The spreading of the NFC technology and the launch of wearable devices.
  • The diffusion of P2P (Person to Person) payments solution

The Mobey Forum defines a Mobile Wallet as a function on a mobile device that can securely interact with digitized valuables. Often it is understood as a means for micropayments, an equivalent of prepaid card. A mobile wallet can contain, generate, and facilitate multiple functions:

  • Financial, such as Financial transaction options (money send/transfer, bill payment, cash-in or cash-out, wealth management, stock exchange investments);
  • Identity, such as Access control (physical or digital) via log-on credentials;
  • Mobile Commerce or m-Commerce: Mobile commerce is any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile devices

We expect that in 2015 there will be multiple mobile wallet launches, often in a partnership business model. For instance in the United Arab Emirates, the Bank Association will launch a mobile wallet in 2015 in common with all the Dubai banks. SIA-SSB will do something similar in cooperation with a number of Italian banks.

Contactless technology will also receive a big boost in 2015, mainly thanks to the launch of the iPhone 6 and Apple Pay. This mobile payment service lets certain Apple mobile devices make payments at retail and online checkout. It aims to digitise and replace the credit or debit magnetic stripe card transaction at card terminals. These Apple services and devices let the latter wirelessly communicate with point of sale systems using NFC, a “dedicated chip that stores encrypted payment information” (known as the Secure Element) and Apple’s Touch ID and Passbook.

Another interesting development in 2015 will be the launch of wearable mobile payments devices, for instance smart watches. For example, users with some iPhone models can use Apple Pay through an Apple Watch, though the watch lacks the added Touch ID security. For added security, the watch’s sensors can ensure that it is still being worn by its owner. If the watch is removed at any point, then Apple Pay is disabled.

P2P Payments will be another big hit for 2015. Person-to-person payments (P2P) are an online technology that allows customers to transfer funds from their bank account or credit card to another individual’s account via the Internet or a mobile phone. The most successful case in the past has been M-Pesa. Launched by Safaricom in Kenya, it has since expanded to Afghanistan, South Africa, India, and in 2014, to Eastern Europe. M-Pesa allows users with a national ID card or passport to deposit, withdraw, and transfer money easily with a mobile device. Now P2P is gaining a foothold in Western Europe too. Barclays launched a very successful Pingit P2P solution, which allows also some international payments. Paym is a similar program that will expand substantially in 2015 thanks to the support of a large number of banks, with HSBC among them.