May 15, 2012
If you are like me, you almost never have cash to pay the bill at a restaurant or elsewhere, but you ALWAYS have your mobile phone with you. So why is it that more people don’t use mobile phones to pay for transactions? Some answers were provided at the CTIA Wireless conference in New Orleans last week.
It turns out that about 85% of global payment transactions today are via cash, and only about 15% of transactions are electronic using payment methods like credit cards or mobile devices. At the same time, there are roughly 6 billion people with mobile devices in the world, and less than 2 billion bank accounts. This represents a significant opportunity for payment processing using mobile devices, which are often lower in cost for merchants and also help save customers time.
Some additional context:
- Wireless penetration in the U.S alone is about 105%, and there is approximately 295M data capable devices
- Globally, more people have mobile phones in the world than electricity
- There is 60% growth in payments with mobile devices, and this is expected to grow from about $200B in 2012 to over $800B in 2014
So what’s preventing us? There are some reasons like interoperability, and challenges like multiple mobile wallets, which are already being worked on in the industry. However, a key point was made by Sprint CEO Dan Hesse. He outlined the critical importance of building trust with customers and the need for improving the reputation of the wireless industry.
In a recent poll of customers, 82% of users do not have safety or security applications installed on their device, and most are unaware of solutions that can better protect them and their family. This is a huge gap, and something carriers like Sprint are taking seriously. According to Fared Adib, Vice President of Product Development, “Sprint is one of the first in the industry to unify innovative safety and security applications from Safely and Lookout in two simple bundles at a great value for our customers.”
Considering no device is more personal than a smartphone, improving security of mobile devices must continue to improve. A smartphone can help customers with banking, travel, buying preferences, health, and even mobile payments. However, more must be done in the industry to improve the security, safety, and privacy of customers. They are all linked together.
Guest writer Glenn Allison is a technology professional in the Midwest with over 15 years’ experience building and managing global communications infrastructure. He is a recent MBA grad from the University of Chicago, and writes about technology and business. You can follow him on Twitter: @GlennAllison.
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