Who is Best Positioned to Win in Mobile Payments?

As the digital landscape continues to evolve, the mobile payments market is experiencing significant growth and competition. With various players vying for supremacy, it's crucial to understand which entities are best positioned to lead this market driven by technologies such as NFC (Near Field Communication) and regional payment networks.

The Global vs Regional Dynamics

The initial phase of the mobile payments market is expected to be dominated by regional players, particularly payment networks that have established themselves locally. However, over the longer term, a global solution is likely to emerge. This idea is supported by the historical precedent that regional payment networks, such as those pioneered by ATMs and debit cards, have been rolled up through acquisitions, enabling cross-border transactions and the exchange of local currencies.

Leading Players and Key Characteristics

Several key players are currently contending for the top spot in the mobile payments market. Each entity brings unique strengths and strategic advantages to the table:

Apple

Wants to dominate mobile commerce and has a robust NFC patent portfolio.

Google

Initially had less experience in physical presence, but with advancements, they are gradually gaining traction.

Amazon

Could expand into physical presence payments and make a strong play for the mobile payments market.

PayPal

Has the best chance if they can leverage their strong online roots in physical presence.

First Data

As a huge payments processor, they have the resources and capabilities to make a significant impact in the market.

The traits that the eventual winner will need to have include:

Lower Cost Processing - Cost efficiency is crucial for widespread adoption. Flawless Consumer Experience - A seamless and user-friendly experience can drive user engagement. Ties to Loyalty or Offers and Context - Integrating mobile payments with loyalty programs or offers can enhance the overall experience. Huge Marketing Budget - Effective marketing is essential to reach a large user base. Regional or City-Scale Launch - Starting with regional or city-specific launches can help build a strong local presence.

Emerging Players and New Technologies

While the major players are differentiating themselves, there are also emerging players to watch. Blaze Mobile, Bling, and Obopay offer alternative solutions that leverage existing technologies and infrastructures. The ISIS (Network Initiative), driven by Verizon, ATT, and Discover, could also gain traction in the US market and possibly replicate this success in other Western markets.

Security and User Experience

The winner in the mobile payments space must prove that their solution is both secure and offers the most simple user experience. This includes ensuring a friction-free setup for merchants and a viral mobile app for consumers. Security, particularly in terms of secure payments and data handling, is paramount for consumer trust and acceptance.

By addressing these key areas, companies like TabbedOut are making significant strides in the mobile payments market. Their innovative solution leverages existing point-of-sale (POS) software to extend the POS to a user's own iPhone or Android device, providing a secure and compliant mobile payments solution without requiring new hardware or accounting changes for merchants.