The launch of Apple Pay late last year was bound to shake up the crowded and fragmented mobile payments market. Banks now face more pressure to make the right plays in this space or else lose their customers.
As things stand, Apple shows strong numbers in both iPhone 6 sales and usage of Apple Pay among its early adopters. Competitors are responding with new partnerships and products. Samsung introduced Samsung Pay at Mobile World Congress, with LoopPay’s magnetic swipe technology enabling mobile transactions on credit card readers. Google acquired mobile wallet Softcard and partnered with AT&T, Verizon and T-Mobile to preload Google Wallet on their handsets, and will also launch a new mobile payments application program interface later this summer.
How these new developments will impact banks and the rest of the mobile payments market isn’t clear. Questions and barriers remain for Apple, Samsung and Google. And the Merchant Customer Exchange lurks in the background with the anticipated launch of mobile wallet CurrentC later this year. There’s a great deal of customer education that needs to be done for any option to gain wide acceptance. This is still a murky landscape for banks to navigate.
As banks and other financial institutions assess their customers’ and members’ appetites for mobile payments options, some are straddling the line between being an enabler of other firms’ solutions and keeping their options open to be able to offer their own, branded solutions some time down the road. While many of these FIs intend to offer open access to several mobile payments and mobile wallet options, some are trying to figure out how and when they could offer white label solutions to their own clients at some point in the future, to allow greater interaction and deeper relationships with them.
Overview by Edward O’Brien, Director, Banking Channels Advisory Service for Mercator Advisory Group
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