While it seems that with every passing day there is positive mobile payment news generated around the world, it is important to remember that not every service or market may be successful. In Germany, retail giant Otto Group has announced it is closing its Yapital mobile payments business (which uses QR codes to enable in-store and online payments) citing weak consumer adoption among other issues.
Commenting on the news, Marc Berg, executive director at Yapital said,
“At the moment it is simply impossible to forecast business performance in this segment accurately – and above all, the development of the number of end-consumers. While we were already talking about the mobile-payment breakthrough three years ago, today studies indicate there are currently only 200,000 users in Germany. We were optimistic to the end, but ultimately things did not work out. We always knew we had to solve the ‘chicken or egg’ issue to be successful. Unfortunately we were only able to solve one side of the equation: acquiring strong and attractive retail partners.”
In general, 2015 has seen largely positive mobile payment news and studies show that interest and to a lesser extent adoption of mobile payment services are growing in many countries around the world. While this positive momentum is good for the industry at some point, greater consolidation of mobile payment services must occur or risk services shutting down as a result of weak consumer adoption as the market becomes saturated.
Overview by Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service at Mercator Advisory Group
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