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Is Apple saving mobile payments?

Mobile payment use is on the rise, due in part to the booming sharing economy, according to the strategic management business unit at Warwick Business School.

 PwC estimate the global sharing economy will grow from $15 billion in 2013 to $335 billion in 2025, this will push up the use of mobile payment technology.

According to Pinar Ozcan, associate professor of Strategic Management at Warwick Business School, the rise of sharing platforms such as Airbnb and Uber means mobile technology is taking an increasing role in the way consumers pay for services and goods.

Ozcan is researching the sharing economy, and says the growth in mobile technology, especially PayTech, is driving its growth.

“Many of these sharing platforms use mobile payment technology and so their growth will encourage the growth of PayTech in this area,” says  Ozcan.

“These platforms encourage business at an individual level, rather than going through companies,” he explains.

“Calling for a taxi through Uber or booking a room on Airbnb or even finding the nearest car repair shop all involves apps,” Ozcan says.

“They are doing business from peer to peer and bypassing companies and it is all done through mobile payment technology.

“This all happens on the mobile phone, it is the device where you book all these things, and the app allows you to send a payment with one click,” he explains.

“Paypal, Apple Pay and Google Wallet have stolen an early march, certainly in the US and Europe, but there are many smaller players with great innovative products in the sector, as we are finding out at the conference.”

Ozcan’s research found that while they recently became quite popular, mobile payments, particularly NFC-based ones, were delayed in the west for 15 years due to squabbling egos of banks and technology firms.

“It has been recognised since the early 2000s that Near Field Communication was the preferred choice of technology to get the mobile payment industry rolling,” says Ozcan.

“But mobile operators needed access to bank accounts, while banks, in turn, needed mobile operators because the user’s bank information and the payment software needed to be integrated into the mobile service of the user.

“But wrangling over who dealt with – and essentially owned – the consumer resulted in it being delayed,” he says.

The arrival of Apple Pay in 2015 brought the return of Google Wallet and Ozcan believes it will lead to rapid growth in the technology that had stalled for more than a decade.

“Now that Apple has joined them, the fact that two big technology players are backing the payments system on their devices will certainly help with more widespread adoption issues,” he says.

 “One interesting difference between Apple Pay and Google Wallet, though, is that Apple won’t have any access to information about what users buy or how much they paid,” Ozcan adds.

“Google, on the other hand, ‘sees’ every transaction that a user makes.

“One thing that Apple has done right is to use its reputation as a top technology firm and platform provider to strike deals with the industry leaders in banking and mobile communications to finally get them to co-operate,” Ozcan continues.

“When a company like Apple gets behind a technology, nobody wants to miss that boat,” he says.

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