As smartphones continue to be more omnipresent in the lives of the ordinary consumer, the mobile payments industry is expected to be worth $503 billion by 2020, according to BI Intelligence. However, one aspect that is holding back the development of this industry is the fact that most e-wallet platforms are non-interoperable.
Since the different service providers are looking to have the biggest market share, they use strategies such as having a stand-alone payment system to stay ahead. Such systems only allow for payments to be made between users of the same e-wallet platform. For instance, Apple Pay users can only send payments to other Apple Pay users. While it might seem counterintuitive in the profit-oriented payment industry, making the platforms interoperable actually has plenty of perks in store for the payment industry. Here is how interoperability among e-payment platforms will benefit all stakeholders in the industry:
It Will Be Convenient To the E-Commerce Customers
Since an e-commerce platform might only accept e-wallet payments from the users of company X, customers are forced to use multiple service providers to make purchases. It, therefore, becomes quite cumbersome for consumers to track the financial details of all their e-wallets. Furthermore, having multiple apps which serve the same purpose- making payments- can be quite draining to the smartphones of the users in terms of storage and battery life of their phones. Instead of having to use multiple platforms, an interoperable industry will allow e-commerce customers to choose the service providers that they deem best while avoiding the above headaches.
The E-Wallet Service Providers Will Make Major Adjustments in the Industry
As the ideas of mobile wallets gains traction among buyers, with the number of in-store payment users expected to reach 150 million by December 2020, the interoperability of the platforms will blur the lines of competition. Aspects such as discounts and incentives will no longer be enough for service providers to bait customers to their side. As a result, companies will need to tap into the different challenges that the industry still has and make adjustments. While the company that makes the most adjustments will probably have the biggest market share, these changes will revolutionize the payment industry and make mobile wallets even more prevalent.
Ecommerce Platforms Can Embrace Payments from Any Wallet
Multiple businesses have benefitted from mobile wallets, with even the smallest setups, such as girl scouts selling cookies, still gaining from the industry. However, a merchant can only accept payments from a few wallets at a time. Since the acceptance rates of the wallets tend to fluctuate with time, it can be tough to keep up with the different rates charged by the various service providers. With an interoperable industry, businesses can choose to work with a single wallet to accept payments from other platforms without having to worry about the acceptance rates.
The disruption that mobile wallet interoperability will bring is nothing compared to the rewards that it promises to the payment industry. All stakeholders are expected to benefit from it. The onus lies on service providers to enhance the infrastructure that can make interoperability possible.