The Asia Pacific mobile payment landscape is currently in an exciting phase of development, but remains fragmented. Asian telcos will likely need to wait at least another two to three years to see traction with mobile payments. Here’s why:
User readiness. Let’s face it: Cash and credit/debit cards still dominate the payment landscape, and are a lot more convenient to use. While penetration of feature and smartphones has grown substantially in Asia, not many people actually use their phones for mobile payments. Even in markets like Australia and South Korea, cash and credit cards remain highly popular among consumers. And if demand remains low, merchants will not deign to accept mobile payments — creating a vicious cycle.
Infrastructure development. Telecom infrastructure in many Asian countries remains uneven with spotty coverage, (e.g. India and Indonesia). Without proper network access, mobile payments will not propagate outside of urban areas, if at all. While Globe’s Gcash has seen some level of success, the truth is that mobile payments remain nascent in the Philippines specifically and in Asia more broadly. In addition, there is still limited handset support for mobile payments (e.g. some Android models are not able to work with a service). Australia’s Commonwealth Bank went ahead with its m-payment launch after deciding not to wait for incompatible handsets to catch up.
In my coverage as Forrester’s new payments analyst, I'll serve consumer product strategists who accept or facilitate payments as they create, navigate, and capitalize on digital disruption within payments.
We are in the early stages of unprecedented innovation and transformation of the consumer payments industry, and emergence of a digital wallet marketplace is the next act. The definition of a digital wallet continues to evolve as innovations come to market, and the term is sometimes used synonymously with “mobile payment.” However, there are significant differences. Forrester defines a digital wallet as:
A digital service — accessed via the web or a mobile application — that authorizes payment transactions from one or more payment sources and facilitates other commerce-related features, such as offers, coupons, loyalty rewards, electronic receipts, and product information.
As new wallets are introduced into the market, we will see consumers and merchants accelerate their trial and adoption. Yesterday, Google announced a new cloud-based version of their digital wallet that intends to address many of impediments associated with their first version. In my new report out today, titled “Why The Digital Wallet Wars Matter," I frame the emerging digital wallet landscape, provide a profile of early adopters and how to capture their attention, and outline which wallets will ultimately win in the marketplace. Here are the key takeaways:
My recent paper looked at the "tap" paradigm exhibited by technologies such as NFC. I want to explore the implications of how the innocuous "tap" points the way to a not just a richer mode of marketing interaction but hints at how the "pay per" market might develop due to offline/online convergence.
There are primarily two models to the placement of NFC campaigns — the first is on your own property, which may be anything like a store, product, poster, or packaging. The second is on the outdoor network of enabled bus stops, cinemas, smart posters, and public screens. Many large shopping centers and 0ut-of-home (OOH) media stations are already enabled with NFC tags and their real-estate can be addressed dynamically by marketers to put apps, links, and media on them.
Examining the campaign management systems for tag-based approaches shows their toolset to be very similar to pay-per-view (PPV) , pay-per-click (PPC), and display tools. The difference with pay-per-tap is that the location the marketing message is delivered into is a tag rather than a a slot in Google Search results or a display location.
The figure below shows a recent campaign undertaken by Blue Bite and RMG Networks. Doesn’t it look just a little bit like the purely online models?
LOOKING AT OFFLINE AND ONLINE IN CONCERT REVEALS THE "PAY-PER-ACTION" MARKET
The PPC and display industries easily have the smartest profiling, placement, and measurement systems but they aren’t addressing the real world, which is slowly filling up with tags and other digital touchpoints.