Posted by Bethany Frank on 21 Nov 2017
The mobile payments space is a crowded one. From retailers to banks to the usual suspects in technology, everyone is eager to compete for a piece of this lucrative pie, which gives consumers considerable freedom of choice.
While there were some eager early adopters, a lack of merchant support and consumer awareness proved to be major challenges that prevented any player from emerging as a clear market leader in years past. Early players like Apple and Samsung faced plenty of resistance from merchants, and many were simply unequipped to accept mobile payments until this year. Confusion around where various platforms were and were not accepted contributed to a discouraged consumer base and low adoption rates.
The tide turned in 2017 as merchants more aggressively promoted their own and other mobile payment platforms, possibly due to the continued shift in consumer preferences toward digital payment methods. The transition to EMV chip cards helped too, as it finally forced merchants to upgrade outdated payment terminals to mobile payment-friendly devices.
Among the major players, Apple took the lead in 2017 with over 50% of all retailers in the U.S. now accepting Apple Pay, including 67 of the top 100 US retailers. The technology giant reports the number of Apple Pay users nearly doubled to 86 million this year. Apple Pay is likely to remain one of the most successful platforms in the market, already accounting for 90% of transactions where mobile payments are accepted. It’s also catching on in international markets.
Looking ahead, Apple is setting sights on “everyday commerce”, which includes things like transportation, pre-ordered food and beverages, and contactless ticketing. According to TechCrunch, “Apple estimates that the number of transactions across these everyday categories is already twice the number of transactions in traditional e-commerce, and growing five times faster than physical retail”.
On the retail side, however, Walmart is becoming a force of its own in mobile payments. Recent reports indicate the number of users for the retail giant’s mobile payment app, Walmart Pay, is close to surpassing Apple Pay. Already available at almost 5,000 locations, Walmart is even hoping to see an uptick in users this holiday season.
After a rocky start, mobile payments are finally catching on among consumers in the U.S. and elsewhere, and there is no going back. As they become comfortable using the technology available to them, consumers will expect fast and innovative payment experiences everywhere they shop.
Check out the rest of our blog for more on mobile payments, and stay tuned as we continue to explore this evolving ecosystem.
03 Nov 2017 Blog What We've Been Reading: Real-Time Payments on the Rise, Apple Pay Dominates A look at we've been reading about payments and financial technology.