“The debate is coming down to two main solutions: physical near-field communications (NFC) payments, such as tapping your phone against the till to pay from your digital wallet (such as Google Wallet), and cloud-based options, such as an iPhone or PayPal app that simply debits money from your account.
But is it all really necessary? Surely in a recession there are bigger problems to tackle than developing costly, untested new payment methods?
Well, half of UK phone owners own smartphones, and ComScore research shows that 4.8 million of them used their device to access their bank accounts in 2011.
IMRG/CapGemini‘s data shows that £940m, or 4% of last Christmas’s sales, were via mobile, and Visa believes that mobile payments in Europe will reach £650bn by 2020 while the UK Centre for Retail Research has said that shopping via mobile phone is expected to grow by 584% in 2012 to £4.5bn. This is seriously big business.
James Richards, director of mobile at digital banking software company Intelligent Environments (IE), believes there is a huge pent-up demand from consumers that is not being matched by the service providers.
“A lot of them see the incredible things an iPhone or Android device can do, and wonder why it can’t do their banking too. And why can’t it? The technology is here,” he says.
Much like most emerging technical standards, a muddled mix of industry protectionism and a lack of clear standardisation has stifled many attempts thus far to provide a clear technological channel for money to flow through.
On the app side, early adopters in the UK, such as Barclays’ Pingit (which allows for financial transactions) and UBS’s more in-depth mobile app are a rarity in this country, yet US and Australian counterparts have had these capabilities for years. Even the third world, such as Cambodia’s Acleda and Thailand’s Bangkok Bank, have superior app-based offerings.”
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