Amazon's push into mobile payments could reflect industry trends
Now that Amazon has decided to compete with Square and PayPal in the mobile payments market, does that mean mobile payments, after sputtering for years, is set to take off?
Yes, says Alberto Jimenez, director of mobile payments at IBM. Jimenez, who has an obvious interest in promoting mobile payments, believes that three industry trends are coming together to give mobile payments a much needed kick in the pants.
The first trend is providing value-added services before and after the actual transaction. These include data analytics-enabled services to find new products and services, save money through price-comparison tools and use location-based services to quickly locate stores carrying the desired item.
The second trend is the use of "cards on file" for repeat customers. "Once the visions of in-store mobile engagement become a reality, 'cards on file' will become a central driver for mobile payments in the offline world as well. That may sometimes not even be in the hands of merchants, but rather in those of centralized repositories that expose APIs [application programming interfaces] to retailers looking to bill/collect from consumers," explains Jimenez.
The final trend is increased security for mobile payments. Due to some highly publicized data breaches, such as the one at Target, transaction security is no longer assumed by consumers. Vendors that can offer a proven security track record and secure tools will gain a competitive edge.
"Industry-wide initiatives, such as tokenization, have the potential to significantly increase the level of security and subsequently the general public perception about payments--specifically the kind initiated on mobile devices," Jimenez concludes.
- read Jimenez article at TechCrunch
- check out Amazon's announcement
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