Could mobile payment at the point of sale ever pay for itself?
Reversing the charges
After a few years of relative neglect, mobile payments are once again a hot topic in the payments market. Much of this resurgence is down to the growing role of contactless payments. The ‘tap and go’ card payments is now finding its way onto mobile handsets as near-field communication (NFC), making the dream of paying for retail goods with a wave of a mobile phone a viable proposition. Combined with customer’s growing acceptance of the mobile phone as a payment device (a third of Londoners now pay their congestion charge via SMS), it is understandable why some industry commentators are getting excited about the potential for mobile phones to become a mass market POS platform.
But while few would question the customer-friendliness of mobile payments at the point of sale, it is not clear how economically valuable this functionality is. At present, UK customers do not pay explicit fees for payments made using cards or cash, while retailers are campaigning to reduce what they see as their excessive contributions to the current payment system. The introduction of new or increased tariffs on individual mobile transactions would run counter to prevailing trends. Banks or mobile operators may require more imaginative strategies for generating a positive return on investment in m-payments at the point of sale. This research looks closely at what those strategies could be.
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