WHO PAYS WINS – THE BATTLE BETWEEN APPLE, VISA AND THE RETAILERS

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It is estimated that the total value of transactions using mobile technology is expected to grow to $173 billion by 2017, at a compounded annual growth rate of 31%.

That latest in the race to be the method of choice is CurrentC. But it’s not just another smartphone-based payment system trying to jump on the bandwagon of electronic payment systems, it’s actually been created by many of the biggest retailers in the US.

Developed by Merchant Content Exchange (MCX) and rolling out during August, CurrentC is designed to rival Apple Pay, Google Wallet and Samsung Pay.

The unexpected factor is that instead of using NFC, it uses traditional barcode scanning on a retail terminal to initiate payment. The company argues that this allows all phones, old and new to use the system – good news for anyone with an older iPhone.

It also debits money from a customer’s bank account, not a credit card, which saves money and gives it an advantage over other systems.

Share across Europe

Android has a 68.9% share, Apple holds second position with 19.0% share and Windows is third with 9.7%. But Apple has a 41% share of the US market, and 42.5% share of the UK market. Smartphones now account for 70% of mobile phones in UK. Remember Nokia? Well the Nokia 1100 is still the world’s best ever selling phone.

Who is behind MXC?

MCX is funded by retailers: Wal-Mart, Target, Sears, Wendy’s, Dunkin, Best Buy, Exxon Mobil, Gap and many others.

The consortium set out to create a payments network that could reduce the power of Visa, Amex, MasterCard, the new NFC payment systems, as well as reducing the fees paid to financial services.

Retailers also fear losing valuable shopping and biographical customer data to the other payment methods, whereas CurrentC can merge payments and loyalty benefits, which will give them additional insight into the spending habits of their customers.

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Ways to pay

Visa has been pushing contactless strongly in the UK and with great success, also helped by backing from Transport for London (to replace Oyster).

Apple Pay is a recent launch and up until now Apple have been reluctant to use NFC, but it’s only available in the iPhone 6 models.

Google Wallet was originally launched in 2011 but didn’t gain enough traction until recently and now Google have said it’ll be renamed Android Pay.

Samsung Pay is trading off the success of the Samsung Galaxy, which has been a massive global seller.

Of course you can also use PayPal which is trusted and used by millions globally.

More recently the Paym app has launched, which is backed by the UK banks (Bank of Scotland, Barclays, Halifax, HSBC, Lloyds Bank, Santander, NatWest,TSB and others), and is a peer to peer payment method, allowing you to transfer money via mobile numbers. It is being made available to more than 40 million customers, which is about 90% of UK current account holders.

Zapp is another Pay-by-Bank app and is supported by Barclays (it replaces Pingit) as well as HSBC, First Direct, Nationwide, Santander and Metro Bank.

And what about poor old Blackberry? Well they have announced EnStream in Canada and BBM Money in other markets (both NFC based).

As for other mobile based payment systems, there have been many that have already come and gone, and many trying to get into what is already looking like a crowded market.

Who wins?

There is little doubt that the retailers want to control the payment method and protect their data, but time will tell if the battle between Apple, Google, credit card companies and the retailers will result in any clear winners or just confusion for the customer

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Chris Arnold is founder of Creative Orchestra Advertising & the Proximity Mobile Marketing specialists, Comobi2.