Apps, platforms, blockchain systems – all of them are digital, most of them are mobile, and none of them can be without a payment service. While the revenue volume is increasing, the applications of mobile payments are becoming more diverse, their number is growing, and their structure is becoming more complicated.
Thus, there are a lot of payment systems. How can we use them at once? Is their unification necessary?
We would like to thank the team at OPEN Platform for their contributions to the research and to the analysis of the result.
Outlines and Perspectives
At the present moment, mobile bank wallets have lower proliferation levels (around 28 percent) than the payment apps (Apple Pay, Android Pay, and Samsung Pay) (49 percent) and merchant wallets (39 percent).
But this situation is not static. There are several substantial processes that are changing it.
What are they, and how will they affect mobile payments?
- The number of mobile subscriptions is growing rapidly. According to Ericsson Mobility Report, their total number was around 7.9 billion in Q1 2018, with 98 million new subscriptions added during that quarter. This is more than the Earth’s population.
- Digitalization is also accelerating. The World Payments Report shows that global non-cash transaction volumes have expanded 10% per year on average.
How many people use mobile payments? In 2014, they accounted for nearly 8% of the total US population. This is a huge portion, but Business Insider promises that it will increase to 65% by 2019. Globally, as Accenture states, 64% of consumers worldwide plan to use a mobile wallet by 2020.
- Next-generation technologies move mobile payments forward. They will cover almost a third of this market by 2023. Mind Commerce estimates the piece at 9 billion dollars.
- What will be the future? The trends point to its digital character. For example, the share of e-wallets will be at 46% in 2021 against 18% from 2016.
These given tendencies tell about the direction for subsequent improvements. What could those improvements consist of?
Where to go?
Where do all of these tendencies lead?
”The increasing competition between mobile wallets, payment card issuers, and mobile operators (…) will finally catalyze in-store handset-based NFC (Near Field Communication) purchases.”
If we take into account the increase of time spent on smartphones, it should impact payment systems too. Mobile devices are inseparable from daily practices that become more dependent on technology. Such a correlation has already been explained in this research – and is currently carried out in this plan.
Is the idea of gathering all means of payment into one place too optimistic?
Development along these lines are already underway – and its appropriateness is shown by the examples of Stripe, Abe, and OPEN Platform. But before we get too far, a couple of matters have to be clarified.
What is the difference between e-wallet players and standard banks? What advantages do mobile payment systems have over the functions of ordinary financial institutions?
“For wallets to survive and maintain the lead over bank-promoted wallets and Unified Payment Interface (UPI) solutions, more innovations are imperative. Also, banks are not going to go away, so there is a possibility of collaborations between financial institutions and banks.”
If such ecosystems have the advantages, then why it would not be blocked by another’s shortcomings, and why would banks not propose the same functionality?
If they don’t have any advantages, then why have they appeared in the first place?
Who is the subject?
To deal with the previous questions, one needs to understand how revolutionary the innovations ought to be.
Answering this, we will clarify how such technologies are perceived and who would utilize them. In other words, who have they been made for?
“An overwhelming number of millennials will turn to social media when looking to purchase. Five out of six millennials who were surveyed said they connect to companies through a social media network, and 95 percent of these consumers take their friends’ recommendations as the most reliable accreditation. What this tells the smart marketer is that their consumers are networking, and companies had better get social fast.”
Thus, millennials appreciate new technologies. But the fact of newness is not enough, the information about what possibilities their application opens is necessary above all else. Moreover, this knowledge cannot be simply given, it should be mediated upon.
Hype is still the important factor for any project, nevertheless, it should not be abstract – the clear position and role is necessary there. However, such narrowing and localization does not shrink the space for creativity. There is a pronounced demand for global solutions which could encompass many local players. The success of RCML and OPEN Platform instantiates this.
Whatever the opportunities may be – performance, conveniences, usability, etc. – it has to be explained how to reach all these things.
Since they cannot be achieved without security, we consider whether or not it matters. This study demonstrates that the major factor stopping the usage of mobile payment services is the anxiety regarding confidentiality.
One possible solution here is the introduction of e-signatures. Gartner Research predicts that by the year 2020, the Internet of Things market will be expanded by 30% and therefore more than 25% of identified attacks will involve it.
Cryptography shall have a more wide scope of applications in the near future. Blockchain-based platforms promise to provide a high level of security along with a high rate of speed. But it’s only a promise.
The goal, the ideal
“So what do we need? It’s to guarantee to incorporate future changes that you wish you thought on the day one. it’s to have a flexible self-governance.”
What is the direction of the payment’s progress? Enlarging the blockchain system’s scalability entails enlarging the requirements to computing power. On the other hand, if everything stays the same, the bandwidth will decrease and the situation will become worse.
Self-governance would allow choosing the right parameters for each case, but it’s impossible to permanently redefine the entire system. If each task could transform the platform structure according to its own conditions, the community should be in complete agreement about what it wants. But it is completely impossible since it is differentiated and its participants have their own goals. The long and complex procedures of agreement will be necessary.
The self-governance becomes a faraway ideal.
What is next?
How do you incorporate future changes in an ecosystem and save self-governance? Any arrangement balances itself. The more flexibility there is, the more agreement and unification that will be present. The less flexibility, the more disparity and diversity. Could we join both of these sides?
There needs to be a platform that is capable to unite these qualities. And this is possible if its community will be neither divided nor unified. Such an ecosystem should connect all other ecosystems and be the medium between them.
“Because it is API centric, the OPEN Platform takes away all the complexity of integrating existing software with any kind of blockchain, meaning no adoptions are needed on any existing backend, for any existing or future cryptocurrency.
The OPEN Platform can support any payment scenario in enterprise environments, Software-as-a-Service scenario, video games and more, by providing the missing components applications need to accept cryptocurrency and the associated payment data. Any application payment scheme can be easily deployed, on any blockchain.”
The middleman linking apps, platforms, and blockchains together seems to be the missing link to constituting the diversity without disparity. The recent Accenture research corroborates the relevance of the unified mobile payments. This feature starts the battle for customers between the banks and the third-party providers.
The interoperability must be constituted here, and the entirely different agents bridged. In order to achieve this, a next-gen blockchain is necessary. It’s OpenChain whose throughput (1000+ TPS) and plug and play API allow to connect the centralized and decentralized worlds – wallets, mobile apps, blockchains.
Thus, any complexity could be simplified, and any simplicity made complex.
Opening the future
It need not create a new project that promises to solve each problem of the current state. In order to use the advantages of every platform, an intermediary instance that would allow the simultaneous working with all of them simultaneously should be established. This is the cornerstone of the current development – and the task of some developing projects.
How do we open this future?