Google Wallet

Mobile Payments Have Lots of Room for Growth, but Just How Much Room?

January 2, 2014 - Written By Nick Sutrich

Back in 2011 when Google and Samsung introduced the Galaxy Nexus to us, they debuted the NFC standard with it.  NFC, for those unaware, stands for Near Field Communication, and it is what allows you to send photos and other information easily and locally to other people with NFC-toting phones with just a bump and a click.  While the technology has been severely underutilized, there’s no area where it’s been less utilized than the mobile payment world.  When Google launched NFC and the Google Wallet, visions of sugar plums were dancing in their heads over the idea of becoming the main payment system worldwide.  Unfortunately those dreams were quashed rather quickly as 3 out of the 4 mobile giants in the US chose ISIS over Google Wallet, and specifically blocked Google Wallet use through their cell networks.  While there have been some hacks to get Google Wallet working on many phones in the past, it’s been a crapshoot as to whether or not it’ll behave, and even then sometimes it’s far too difficult for your average Joe to even consider doing.  Business Insider recognizes this huge potential for growth in the mobile payment sector and has created a full report on just how much room there is for growth.

mobile payments

While the chart above isn’t really all that astonishing in terms of how little mobile devices are used for actual payments, it’s actually rather surprising just how much they are used.  Given the fact that there’s no real standard for anything when it comes to mobile payments yet, as we pointed out in this little editorial leading up to the Holidays, there have been some significant improvements in the mobile payment world that’ll likely get things going a little quicker on the standards front.  First of all Google removed the requirement for a secure NFC element when it introduced Android 4.4 KitKat, which means that all phones can now use Google Wallet without having to specifically have support for it so long as the phone is running Android 4.4 KitKat.  The secure NFC element was the biggest hold up for progress on the mobile payment front, and the main thing that carriers were complaining about when it comes to using your phone as your debit or credit card.

Then there are the other potential contenders for the crown, such as Samsung Wallet and PayPal, which like Google Wallet provide special discounts and goodies for using them at certain retailers.  Apple has even jumped onto the bandwagon with their own iBeacons system which allows for bluetooth-powered mobile payments instead of NFC.  There’s been a 118% annual growth rate of mobile payments in the US alone, and mobile payments are currently sitting at 4% of total worldwide transactions.  Retailers like Starbucks have their own payment apps for paying with gift cards too, which tends to muddy up the waters even more.  For now though mobile payments are catching on more and more, and the growth rate will only get higher from here on out.