The mobile payments space is filled with many competitors, ranging from technology giants to social platforms. But it’s hard to gauge which company will be the first to gain mainstream traction, as they all seem to suffer from similar setbacks. That being said, social platforms seem to have a leg up over their competitors, if they play their cards right.
On the consumer side of things, using mobile payments seems quite simple. All they need is a particular application and a recipient’s phone number or email address. Once the user links their debit card or bank account, sending payments online takes a few taps on the screen, and they are done.
But for the companies offering these types of solutions, things are very different. Any mobile payment solution hinges on card issuer and bank participation, which can be a significant hurdle. Additionally, very few platforms can offer global payments from day one, due to each country have different regulatory frameworks and licenses that need to be obtained.
To compound matters, once consumers get their hands on mobile payments, the question becomes if they will continue to use this payment method. Apple Pay users have mentioned before how they forget the payment option is available to them. Moreover, there is the question of whether or not merchants see the value of accepting all of these various solutions. Mobile payments require a terminal hardware upgrade, which does not come free of charge.
All of these possible drawbacks are not keeping technology giants and social platforms from exploring the mobile payments industry, though. While the competition between Apple, Android, and Samsung is heating up on one end, Facebook, Line, and Snapchat are duking it out on the other end of the scale.
One thing technology giants such as Apple and Samsung have going for them is the position they can leverage. Keeping in mind how some of these companies bring a lot of business to particular regions, they hold a lot of power. But that does not mean governments and banks will simply roll over, though.
That being said, Apple has managed to strike some exciting deals in the past, and they are now venturing into China as well. In this market, they will go head-to-head with Alipay, which is the dominant mobile payment player in this corner of the world. Samsung Pay, on the other hand, is starting to roll out in Europe as well, with Spain being their first venture into the continent.
Social platforms such as SnapChat and Line, on the other hand, have a higher convenience factor. Most consumers want convenient payment solutions, and simply ‘texting funds” is a powerful tool. Apple Pay and consorts all require users to install new applications, which forces users to think about how they will pay for goods and services.
Despite the convenience edge, social platforms are still bound by the same rules when it comes to mobile payments. Without participation from banks and card issuers, there is no option to send or receive funds. Once again, there is no global availability from day one.
In the end, it will be difficult for either industry to gain a competitive edge in the mobile payments sector. Collaboration between technology giants and social platforms is well worth considering at this stage. But until that happens, social platforms may have a better shot at nailing convenient mobile payments.
Header image courtesy of Shutterstock