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Prepared by Helene Andre, Business Development & MarketingFor PRIME Paris Region International Mission Enterprise
February 2015
Insights from Silicon ValleyMobile Payment
Mobile Is Ubiquitous
58% of American adults have a smartphone, 32% own an e-reader, and 42% own a tablet computer
On Thanksgiving 2014
US-based mobile traffic accounted for 52% percent of all online traffic – 1st time mobile devices outpaced their PC counterparts for online browsing
mCommerce Is Booming
44%34%
57%
30% of all eCommerce traffic in the US comes fromsmartphone & tablet devices
Some retailers’ businesses are completelymobile-driven
57% of its Target web traffic is mobile-only
… and It Is Hungrier and Hungrier
Mobile-based payments in the U.S.
P2P In-store App & Web
20132019
$17b
$34b
$91b
The impact of EMV on mobile payments
Liability shift in October 2015 from card companies to merchants forcingthe latter to change their POS to be EMV-compatible
Paving the way for new POS terminals that can be NFC or Bitcoin enabled
The Nebula of Mobile Wallets
Brand-Centric Consumer-Centric
Apple Pay Vs. Google Wallet
Apple Pay is not a disruptive technology butrather a great combination of UX, NFC withsecure element, biometrics and tokenization.Apple collaborated and negotiated fees withbanks and credit card issuers. Apple workedwith all the stakeholders and did not act as arebellious teenager.
The real disruption is for online payment,as Apple Pay makes online payment as secureas in-store payment.
Currently Google wallet faces major logisticalhurdles as it works in a very fragmentedecosystem. Apple is completely integratedwhile Google develops the software, but thedevices are manufactured by others likeSamsung.
The rising sales of Nexus can shake thingsup but it may be too late for Google to takethe lead on Android-powered mobilepayments.
Focus on Some Brand-Centric Apps
The most successful is Starbuck :
In 2014, $1 billion wereprocessed via its mobile app,which represents 11% ofStarbuck’s sales volume
Each week it counts more than 6million transactions.
Uber, the car-hailing app,processed $30 million this year in2014
Uber payment process is part ofthe whole UX and partiallyexplains the success of this full-stack startup.
Retailers’ and companies’ apps rely on two key success factors:
• The power of the brand
• The loyalty program and its incentives
This model also reduces interchange fees for retailers through pre-loading
.
Even less venturous companiesare jumping on the bandwagonsuch as Target and its app thatlets users scan products onmagazine, add to cart and checkout.
CurrentC, the Hybrid White Knight
CurrentC by MCX
Created in 2011 and led by companies like Walmart, CVS and Lowe’s. Altogether, the participating retailersoperate more than 110,000 retail locations and process over $1 trillion in payments annually.
The solution is a QR code-based mobile wallet that lets customers securely save, earn participating merchantloyalty rewards and pay across the network of merchants. The big advantage of the solution is that it solvesboth mobile payment & loyalty challenges.
If CurrentC caught on, partner retailers could escape tons of fees, which could directly increase theirprofits. Alternatively, they could use the leverage of MCX and the threat of sidestepping the processing feesto negotiate lower fees with the credit card companies.
Emerging challenges and opportunities
Upcoming technologies
Challenging market fragmentation
Cryptocurrencies and the block-chain technology
Beacons for personalized and geolocated advertising & couponing
Wearables and Strong Authentication
The mobile payment is still the Wild Wild West with no standard,no constraint. The implementation of EMV is a first step in thestandardization, NFC could be a second pillar.
Sources
http://www.businessinsider.com/the-future-of-the-mobile-industry-2014-11http://www-03.ibm.com/press/us/en/pressrelease/45515.wss
http://bits.blogs.nytimes.com//2014/11/17/u-s-mobile-payments-market-to-boom-by-2019-research-firm-says/http://www.pewinternet.org/fact-sheets/mobile-technology-fact-sheet/http://a16z.com/2014/10/28/mobile-is-eating-the-world/
About PRIME & French Tech Hub
PRIME is a transatlantic innovation platformpromoting the Paris region as a center of innovationand engaging in activities to encourage andincentivize American companies and organizationsto invest in the Paris region.
PRIME is a subsidiary of the Paris Region EconomicDevelopment Agency.
French Tech Hub serves as the U.S. Hub forentrepreneurial and innovative French companies.We provide custom-tailored services to help ourclients strategize, launch, expand, and achieve theirbusiness potential.
For more info,
contact Marie-Perrine Durot
For more info,
contact Marie Buhot-Launay [email protected]
