In the third part of the Verizon Ventures predictions series, Vijay sits down with Verizon Ventures portfolio company SimplyTapp to take a look at how payments will take on a new form in 2016.
At Verizon Ventures, we have been keeping a close eye on the mobile payment space, which has been rapidly evolving over the past year. It’s an exciting time for mobile payments—in this week’s post, I sat down with the SimplyTapp team to find out what they think is in store for mobile payments in 2016. SimplyTapp creates new platforms that enable developers to leverage mobile devices for tap-payments and other real-world transactions.
According to SimplyTapp, in 2015, customers expressed their dislike for traditional banking and payment services time and time again. As a result, 2016 will bring rampant change in the Fintech world. Companies will work to meet expectations of customers and legacy providers will play catch-up with some of the newer models.
From a consumer standpoint, SimplyTapp sees 2016 as the year of expectation. Consumers are more aware of contactless payment solutions than ever before and, as a result, will expect a more ubiquitous approach. Consumers are starting to develop clear preferences—they like paying with their phone on the go, they know what they like and what they don’t like, and they’ve overcome many of the hurdles to adoption and are ready for merchants to follow suit. Additionally the “unbanked generation” of millennials is increasingly avoiding traditional banking practices. FirstData found more than 70 percent view banking interactions as transactional rather than relationship-driven and would rather go to the dentist instead of hearing what banks have to say. In 2016, consumer expectations will take center stage and show how mobile payments are “supposed” to be done, and businesses will look to new tools for growth.
SimplyTapp also sees an uptick in banks providing their own mobile payments experience alongside their mobile banking services in the coming year. Similar to what we’ve seen from the Royal Bank of Canada (RBC) and Capital One here in the United States, banks will continue to roll out mobile payments solutions. While in-market wallet and bank-driven solutions will continue to gain momentum, ultimately banks will take the lead because of the natural fit to their business.
Yet, SimplyTapp also sees a continued push from in-market wallets like Apple and Samsung. However, they will face challenges when it comes to cost of customer acquisition. eMarketer approximates mobile transactions in the U.S. will grow 210 percent, with one in five smartphone users making transactions with their devices.
2016 could also usher in brave new models and providers for mobile payments in the form or social platforms and networks—according to SimplyTapp. Twitter, Facebook, and Snapchat are just a few of the companies looking to expand their service offerings by embedding payments into the product experience. This is definitely a growing area. Juniper is even projecting mobile fund transfers via social technology to bring in $2 billion by the end of this year and $4 billion by 2018. Networking platforms will begin assuming more roles and increasingly transition into the payment space.
2016 will see payments take on entirely new forms, beyond traditional transactions. From social networking to mobile wallets, 2016 will see immense growth in the Fintech space.
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