Apple Passbook, Google Wallet & Microsoft Hub aren’t after just your bill-fold
Apple and Microsoft both jumped into the mobile payments market last week, following Google, countless startups, most mobile network operators, many banks, and several financial services firms. With global mobile payments expected to top $1 trillion in 2015 (growing at a CAGR of 97.4% from 2010), it’s not hard to understand why so many companies are unveiling eWallets and other mobile payment tools now.
Like Google’s digital wallet, Apple’s Passbook and Microsoft’s Wallet Hub will let you store boarding passes, loyalty cards, and movie tickets in one place. And, if they are not doing so already, all three companies are expected to integrate Near-Field Communications technology (NFC) so that you will soon be able to make contactless payments using your American Express, Visa or MasterCard accounts at retailers across the globe.
Surely, they will all benefit from the rising tide. But intensifying demand from consumers and retailers alike for seamless mobile payments will force collaboration across technology providers, network operators, and financial firms, and drive margins down. Processing retail transactions will likely be a low value, high volume activity.
Real value-added for companies in this space will be created by the convergence of point of sales transaction technology, geographic information systems, analytics, and customer relationship management tools. Companies that achieve broad adoption of their eWallet products will be deluged with consumer spending information. The transaction data gathered by these applications, combined with the geographic information already being harvested from smartphones, should provide a rich cache of customer data.
The possibility of turning this cache into consumer insights and targeted advertisements is one of the main reasons why the big three—Apple, Google, and Microsoft—are so interested in mobile payment systems right now. Their objectives in this space also present a challenge to sites that claim to provide targeted advertisings, including Groupon and Living Social. As a result, the transition to mobile payments will likely ignite a wide variety of deals involving much more than just NFC technology companies and e-payment providers.
Posted by JasonSteblay, Research Analyst on 29 June 2012