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Mobile payment: A trend in its infancy

The idea of using smartphones for payment processes is logical. After all, 65 percent of German internet users carry one of these devices around with them. And at least in theory these devices can greatly simplify, accelerate and automate payment processes.

Thus experts have been forecasting a big breakthrough in mobile payment for over ten years now. And 2014 is no exception. The market is on the move and expected sales are high. In Europe alone, the volume is expected to be around 75 billion euro. According to the U.S. market research firm Gartner, about a half a billion users are expected to transfer approximately three-quarters of a trillion dollars using mobile devices in 2017. The hope is that once the initial hurdle has been overcome, mobile payment move away from being hype and become a true a competitive advantage. Once this has taken place, it will be self-perpetuating.

But as it stands, customers still love their cash. This is especially true in Germany, where even credit cards play a much smaller role than in most other countries. According to the 37th W3B study conducted by market research firm Fittkau&Maaß, every third smartphone user has already used his or her smartphone for online shopping. But only 2.4 percent of the users have used their mobile phone to pay on location at retail outlets. The picture is in fact quite different when it comes to offline business: “Only 11 percent of the consumers would want to pay in a store using the retailer’s smartphone app”, according to iBusiness.de in February 2014 based on its own research. Of those customer who want to pay using their smartphone, 85.6 are interested in paying via PayPal according to research conducted by ECC, which is situated in Cologne. Other payment methods like NFC (16.3%), Gmail account (14.8%), QR code (14.4%) and Apple ID (13.7%) enjoy much lower levels of popularity.

At the end of the day, there are too few verifiable advantages over bank cards for example. Mobile payment alone has yet to save time waiting at the checkout nor is associated with exclusive advantages or savings. Anything that might make the payment procedure more complicated than cash or card may be exciting for technology enthusiasts, but not for the masses. According to an eco analysis, providers have not yet come up with creative enough ideas for sensible usages. A prime example of such a creative ideas is the myTaxi app, in which mobile payment is a logical step. It can be used to order a taxi, evaluate the driver and save them as a favourite driver and even pay for the ride.

However, according to the eco association, most of the approaches simply increase the costs of processing without adding enough value for the consumers. Only if the big players like Amazon, Apple, Google, Deutsche Telekom, Vodafone, O2, or the Visa or MasterCard organizations would develop a comprehensive mobile payment solution, would their be a true chance for smartphone payments in Germany.

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