The traditional, hard currency based wallet faces a big challenge from alternative payment methods, as mobile payments are fast approaching a tipping point.
Worldpay found that in-store mobile spending grew 328% year on year and almost a third of consumers take advantage of their phone’s payment capabilities. This is set to grow even further as the majority of consumers can see a future where mobile replaces traditional bank cards altogether.
And yet, that doesn’t mean that mobile will be the only payment solution available in the future. There are plenty of regions where alternative payment methods may be preferable because card penetration is low. For instance, Slovenia, Bulgaria and the Czech Republic, the top three growth markets in Central and Eastern Europe (source: Fortumo) have credit card penetration rates of 35%, 12% and 26% respectively.
In Asia and the Middle East the picture is even more complex. Despite high demand for mobile payment methods, factors such as a lack of trust in banks and payment infrastructures prevent contactless payments to take hold. The mobile payment industry is undergoing major change and there is all to play for. Direct Carrier Billing (DCB) for example is an attractive payment alternative as it’s separate from bank account or card ownership. Consumers can charge products directly to their mobile phone bill: it’s provides a frictionless customer experience that retains the convenience of contactless payments.
Find out more about the DCB opportunity here.