Mobile Payments Backed by Credit Cards? Not So Much

by Net Future Institute on March 26, 2013

The mobile payments space, especially around mobile wallets, continues to get interesting.

Two separate pieces of news today give yet another indication of the complexities of some of the aspects of mobile payments.

The CEO of Visa told an audience at the Barclays Emerging Payments Forum essentially that the credit company sees charging transaction fees to wallet operators as logical. This echoes the coming MasterCard fees being added to PayPal, according to eBay.

The second piece of news is even more interesting with the credit card backdrop.

It turns out that the majority (62%) of Web purchases are paid by credit card but mobile payments are at the other extreme.

For mobile-based transactions, the majority (78%) of payments come from alternative payment methods, with credit card payments accounting for only 22 percent of transactions, according to a study of transactions across the commerce platform of Atlanta-based ShopVisible.

The largest mobile payment method was by PayPal, with almost half (46%) paying that way, and about a third (32%) paying by Amazon Payments.

There’s little doubt that consumers are increasingly using their phones to pay for various things, both digital and physical.

For example, the CEO of Starbucks told shareholders yesterday said that the coffee chain is seeing more than 3 million mobile transactions a week, about 10 percent of its total revenue take.

This also points out that mobile payments are hardly in the majority for payments overall, the same with some other mobile activities, such as in-store barcode scanning.

In the ShopVisible study, for example, only about a quarter of the tens of thousands of transactions measured came via mobile, the remainder from the Web.

But it seems obvious that more consumers will be paying using their phones.

All of this could lead to a new definition of what “charge it” means in mobile.

 Chuck Martin is editor of mCommerce Daily at MediaPost and writes the daily MobileShopTalk. He is author of “The Third Screen,” “The Smartphone Handbook,” and the soon-to-be-published “Mobile Influence.” He is CEO of Mobile Future Institute and a frequent mobile keynote speaker around the globe.

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