MOBILE PAYMENTS

While the mobile payment infrastructure is now in place (NFC-enabled phones and POS terminals, various platforms such as Apple Pay), we are about to enter the second phase of growth for the theme, which is mass adoption of payment solutions by consumer.

Increasing marketing and improving ergonomics, security and value-added services (such as rewards, loyalty and couponing) should give a major boost to consumer engagement.

Mass adoption is not a question of if, but when:
 

• the example of e-commerce says it all: despite initial concerns around security, now most consumers make online transactions,
• new forms of mobile payments will expand the total addressable market: in-car payments and VR shopping.
   

Government incentives for a cashless society are another major catalyst: increasing number of limits on cash transactions all around the world.
 

The best way to capture this secular growth in the volume of digital payments is to get exposure to payment processors, which handle all these transactions.

THE USER EXPERIENCE

IS THE KEY IN MOBILE PAYMENTS ADOPTION

• The biggest challenge remains the change in consumer habits. It has to be simple, intuitive and comprehensive.
• Mobile payment requires better communication and education.
   
• Mobile payments allow the merchant to increase the visibility on its brand, target consumers and increase loyalty services (e.g. coupons).
   
• As illustrated by the recent success of Samsung Pay’s loyalty program, rewards/couponing are expected to be a major catalyst for mobile payments adoption.

SECURITY CONCERNS
NEED TO BE IRONED OUT
 

With tokenization technologies and the emergence of biometrics, mobile payments become more secure than contactless card payments.

GOVERNMENTS AROUND THE WORLD
PUSH TOWARDS A CASHLESS SOCIETY

To fight money laundering and tax evasion in 2014, Israel limits cash transaction between businesses to 5,000 shekels (USD 1,400) and private transactions done in cash or by check to 15,000 shekels.

In most EU countries cash payments are limited:
 

• In 2015, France has limited the use of cash payments to EUR 1,000 from EUR 3,000.
• In 2016, Italy has limited the use of cash payments to EUR 2,999.
• Germany plans to impose a limit of EUR 5,000 on cash payments.
   

India demonetized some of its banknotes at the end of 2016.
 

The European Union plans to launch a service by the end of 2018 that allows mobile payments person-to-person using the mobile phone number as a proxy for the IBAN.

THE PAYMENT INDUSTRY:
A PRIVATE CLUB?

• New players enter the payment industry, already benefiting from a large customer base and offering many online services: Internet and Tech giants such as Google, Apple, PayPal and Amazon are providing new mobile payments solutions.
  
   
• The legacy players (telecoms, banks, card networks…) must assert themselves. The need for innovation is the opportunity to boost these institutions and offer them a new position in the payment industry.

A LOOK AT THE PAYMENTS INDUSTRY
MAIN PLAYERS

A LOOK BEHIND THE SCENES

I - BANKING DATA CAPTURE AND AUTHORIZATION