julio 22, 2016 10:40 am
So far we’ve analysed examples of tried and tested mobile payment solutions. But what if a player is considering the launch of a new m-payment solution? What strategic and marketing approach should be taken? Well, first of all it should take into account the following insights:
- One of the key challenges that the mobile payments market faces is the high level of market fragmentation, that is, the amount of platforms/solutions technologies being used and the increasing range of service configurations being offered. This is slowing down merchant acceptance and making it difficult for providers to gain scale. Hopefully the alliance between Apple Pay and Orange Cash in France will be one of the first steps of consolidation among players and solutions.
- Mobile payments are gaining traction, yet still represent a small portion of total consumer payments. The main barriers to consumer adoption are security and privacy concerns, so it is key for new mobile payments solutions to earn consumers’ trust from the beginning with secure schemes.
- Value-added models are becoming popular in the mobile payments arena. Some of this offerings take the form of white-label applications development for vertical industries, and this type of model is expected to grow given the benefits that it brings to all parties.
- The key to successful m-payment applications is the ability to make them extensive, so users grow to rely on them. Partnerships with ecosystem participants from all sectors (banks, retail, public sector and service providers) are essential to building a ubiquitous network of acceptance points.
We know that having a good payment app is not enough to succeed in the market, to build a viable business between the high number of competing solutions for mobile payments, players must take a strategic approach to the market. The question is, in order to succeed, should these players target consumers first so they chose a payment method or would it be better to target retailers so they act as prescribers?
Well, success is going to be based on obtaining extensive acceptance from both consumers and merchants, in order to create a ubiquitous payments network that can keep users interested. First, m-payments providers should work closely with merchants to ensure their solution is easy to use and reliable in order to earn consumer trust. A flexible and affordable system that help convert more users is also key. On the other hand, providers’ value proposition should focus on user’s priorities, this being security, simplicity, speed and convenience, as in the case of Starbucks app.
The key is to create a thick market of merchants, consumers and accounts that work across any mobile device, and can use at the places consumers routinely shop. In short, a market where there are lots of willing participants who know they can interact with each other eliminating any type of uncertainty.