Mobile Payments Getting the Jolt They Need in Low-Value PaymentsChristina Sommer |
Mobile Payments are starting to take shape in the United States and Canada. Yes, as we say on the Mobile Payments Readiness Index (MPRI), it’s still very early days for this payment type; however some promising things are beginning to happen. Just last Friday, Rogers Communications, Inc., the largest telco in Canada, and CIBC unveiled the first Tap & Go™ payments app in Canada. Branded by Rogers, “Suretap”, the app enables small-ticket purchases, primarily for transportation needs, restaurants, and groceries. The application relies on NFC to complete the purchase. Rogers predicts that 80 percent of mobile devices will be equipped with NFC by 2016 and total purchases will top $14 billion in Canada.
In the United States, which ranks third on the MPRI behind Singapore and Canada on in mobile payments readiness, Starbucks is beginning to put mobile payments on the proverbial map. Also last week, Starbucks announced that each week, two million mobile payments transactions occur at their US based stores. Since its inception in January 2011, Starbucks mobile app has now reached 100 million transactions. While these numbers are small in comparison to other form factors, they represent baby steps toward mobile payments adoption.
Powerful retailers like Starbucks and large telcos like Rogers have the ability to move markets forward. Mobile payments afford both companies significant opportunities – for Rogers a whole new revenue stream, for Starbucks faster moving lines and greater loyalty. As these companies pave the way and start to reap the rewards of mobile payments, I expect other retailers and telcos will follow suit. Howard Schultz, president and CEO, of Starbucks said recently that companies need to recognize the shifts in consumer behavior as a result of emerging mobile payments and mobile commerce in general and capitalize on them. Well said in my opinion.
Topics: Payments Strategy