The three conditions needed to drive customer uptake of mobile payments are consumer demand, a clear consumer benefit, and an eWallet stored value, according to a recent GSMA discussion paper. The first condition might be most open to debate.
The card companies first developed their business models as acceptance-led, meaning it was the merchant’s willingness to accept card payments that drove customer demand for store and charge cards down to credit cards. In many emerging markets today, cards are available and consumer demand exists, but there is nowhere to use them due to merchant acceptance issues such as interchange fees, the cost of point of sale terminals, and reliable communication networks.
Unresolved issues include how to translate the old card payment acceptance-led model to the modern mobile payment business model, how to drive merchant acceptance of mobile payments, particularly in emerging markets, and what incentives merchants have to accept mobile payments in the first place. Once these questions are answered, there can be a focus on encouraging consumer demand for mobile payments.Back To Blog