Future of M-Payments Uncertain, NFC or Not
Wireless carriers’ lack of support for NFC mobile phones and consumers’ slow adoption of mobile payments have analysts worried about the future of m-payments. Strategy Analytics recently lowered its NFC projections, saying that 115 million NFC handsets will be responsible for spending $48 billion via NFC phones by 2017, down from an estimated 158 million phones spending $53 billion in its July forecast. “Alternative methods of making in-store mobile payments through solutions such as LevelUp and Square Wallet have gained pockets of traction, and are fragmenting the mobile payment sector,” analyst Nitesh Patel wrote on the company’s web site. Plus, he reasoned, the prospect of PaylPal and Apple launching alternative mobile payment solutions based on Bluetooth Low Energy (BLE) “adds further uncertainty to the role of NFC in supporting in-store mobile payments.” In addition, wireless operator support for NFC payments is “anemic,” according to Strategy Analytics’ forecast. Many networks have pushed back the rollout of contactless payments into 2014. The firm also cited concerns about the fact that Isis’s consortium of banks and carriers are behind schedule in activating NFC payments. Whether or not NFC remains the top technology for mobile payments, the industry still needs consumers to get on board. 34 percent of consumers say they are “not interested” in paying for purchases via mobile phones, according to TSYS’s 2013 Consumer Payment Choice Study. Even more – 38 percent – don’t want to establish a prepaid account in which the account is automatically reloaded from a debit or credit card for small purchases. 33 percent have no interest in the ability to instantly transfer money to others, a highly touted feature of both Google’s (NASDAQ: GOOG) Google Wallet and Square through its new Square Cash program. Instead, consumers are most interested in using their smartphones to stop a transaction that was not made by them (40 percent), instantly view transactions made with debit and credit cards (37 percent), and receive instant offers and promotions from stores they are visiting (33 percent).