The development of smartphones has gone and replaced a few things we grew up with: the watch, the alarm clock, the tape recorder, music players, and it seems that very soon, we can add cash and wallets to that list. It’s hardly a surprise.

Image: Michael Mahmood

Image: Michael Mahmood

Payment methods have been morphing through various channels: from cash to cheques, to credit cards and debit cards, and now to online banking and mobile commerce.

There are 6 billion mobile phone subscriptions in the world, and more than a billion smartphones already in the market.

Perhaps it’s just a matter of time before we embrace the idea of losing that wallet and opting for a digital one to buy flight tickets, lunch, coffee or even to pay the rent.

Read more: Mobile payment systems: The era of a cashless future.

The Mobile Payment Revolution

People are turning to mobile apps such as Apple Pay or Venmo and the big banks are scrambling to adapt. Forrester Research predicts that mobile payments in the U.S. will reach $90 billion in 2017. CBS News senior business analyst Jill Schlesinger joins “CBS This Morning: Saturday” to discuss what's driving this change.

Trends In Mobile Payments You Need to Know About

The mobile payments space has been touted as the next big thing for some time now.

Image: Forbes

Image: Forbes

For almost as long as the mobile device revolution, industry watchers have predicted that the ubiquitous nature of mobile devices signaled the end of the traditional wallet — that, soon, cash and credit cards would give way to a new technology embedded into our mobile phones.

Mobile payments—those initiated on a mobile device such as a cell phone or tablet computer—have received a significant amount of attention recently.

Yet, despite the attention, mobile payments have not been widely adopted in the United States.

While industry experts agree mobile payments eventually will take off, there are many barriers. Some barriers are on the supply side—for example, the difficulty of getting industry participants to agree on technological standards and the lack of compelling business models for participants. Barriers, however, also exist on the demand side.

The Future of Mobile Payments: Google Hands Free

Are you ready to pay at the cash register with your voice?

This week Google introduced a new, potentially simpler way to get folks to ditch their credit cards at the register. With Handsfree, a new app, you can pay with the phone but without reaching for your Android handset or iPhone.

Handsfree is a new app, being tested in San Francisco at a handful of McDonald’s and Papa John’s Pizza locations, that lets you approach the cash register and simply say, “I’ll pay with Google.”

Google Voice Payment podcast

Image: USA TODAY

USA TODAY Tech Roundtable hashed out the positives and negatives of Google’s new try for mobile pay on this week’s edition of the Talking Tech Roundtable podcast. Listen here.

Mobile Payments Case Studies

Apple Pay: According to data, 80% of iPhone 6 users had never used Apple Pay and just 3% used it regularly. Apple Pay (NASDAQ: AAPL) was introduced 18 months ago to rave reviews from the press and technology analysts. Customer satisfaction among Apple Pay users remains high, but word-of-mouth appears to have had no impact on adoption.

It appears that Apple Pay is struggling to “cross the chasm” between early adopters and mainstream consumers. From the perspective of mainstream consumers, mobile payments are no more “mobile” than a credit card or cash.

Mobile payments are a much more elegant solution when used for digital purchases made on the smartphone itself (or order ahead solutions for in-store pickup). Here, mobile payments solutions add convenience by saving you the trouble of manually adding in your credit card or verification details, read more in: Explaining The Struggles Of Apple Pay And Mobile Payments.

UK Mobile Payments – PYMNTS asks: For a few years now there has been talk about the approaching breakthrough of mobile payments. Until now, this breakthrough has failed to materialize in the U.K. What are the reasons for this?

Morgan Beard, Strategic Marketing Director at TSYS, responds: In general, for mobile payments to take off, three key technology adoption challenges need to be met. From the consumer side, the level of penetration of smartphones has to reach that tipping point, and from the merchant acceptance perspective, it’s all about the POS terminals and how they need to be upgraded to accept NFC payments. Then there’s the play around security, with tokenization, the secure element, and HCE, etc.

Smartphones are pretty much ubiquitous, the POS terminals are all going to be NFC-enabled throughout Europe due to the 2020 Visa and MasterCard mandates, and that just leaves the consumer concerns with security. That was really demonstrated and stuck out in the report, where consumers rated security concerns as a leading impediment to adoption.

The long-term viability of mobile payments is about more than just overcoming technology constraints. It’s really contingent upon the entire ecosystem to deliver much more of a demonstrable value-add for the consumer above and beyond the traditional physical card payments. Read more on Turning UK Mobile Payment Awareness Into Usage.

Image: 1Mobil-e

Image: 1Mobil-e

Despite the fact that it is still early for mobile payment systems,…

… Mobile Is The Closet You Can Get To Customers

Today, more than 60% of your potential customers are on mobile devices. Thus optimizing your regular, desktop website for mobile phones is a MUST. If Your website is not mobile optimized, you are probably losing more than half of your potential customers!

“Businesses should treat mobile as separate and divide campaigns into separate desktop and mobile campaigns!” says Matt Lawson, VP marketing marin software San Francisco. “Businesses need to think about device strategy – how do they target users on specific devices to increase relevancy and success,” he said. Using a dedicated, separate mobile website that focuses on mobile customers using their mobile phones differently from how they use desktop websites can increase your conversion rate by 20% to 30%. Get your mobile website before your competitors do (and take a major part of your market share in mobile customers).

What's Next in Mobile Electronic Financial Services?

Disruption in Financial Services

At the TiE LeapFrog, Nandan Nilekani spoke about disruption in financial services citing the example of Whatsapp’s innovation in the messaging space. “Just as WhatsApp disrupted the messaging space from 2009 onwards, digital innovation is changing the payment and banking space in India,” he said.

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