What will it take for mobile payments to take off?

A frequent theme here at BillingViews is the slow uptake of mobile payment adoption and the disappointing sighs that go along with it.

The subject has come up time and time again but usually in the context of who’s coming out with a new payment scheme and why it’s better and different than anyone else’s. But as keen industry watchers know, all the bells and whistles in the world won’t make actual customers download it and start using it.

So what will it take? PayPal for one is hoping that exclusive perks will do the trick. Its new PayPal Select, a loyalty program for its most active users, will reward people who often use the company’s ubiquitous payment system. These rewards come in the form of exclusive shopping opportunities at online retailers such as BestBuy.com, Overstock, Target.com, Neiman Marcus and several more that are already on board. Members will also get priority access to customer service reps, which one hopes is a perk that never needs to be used.

The invitation-only program is only being offered to customers that PayPal deems to be worthy based on how much they use the service. Interestingly, people seem to have wised up to phishing and other scams that seem to originate from legitimate sources, with many questioning whether their invitations were legitimate, as evidenced in this exchange on the popular site Etsy.

Suspicion aside, will giving special opportunities to buy even more stuff using PayPal be enough to incite people to join PayPal Select or use the service even more in order to receive a coveted invitation? According to recent survey results from PayPal itself, of 15,000 respondents across 15 countries 78 percent say paying online is easy while 40 percent say they don’t make payments from a mobile device.

The biggest deterrents to mobile payments, according to the survey, are fear of online fraud and concern about payment information being stolen. It would make sense for PayPal and others to address those issues more adequately than focusing on making their services more exclusive.

PayPal is not alone in coming up with something different to entice customers. For example, Twitter just acquired payments platform company CardSpring with the goal of creating a full-on e-commerce offering in the future. At first, it looks like Twitter will give users what it already does – facilitate deals and discounts directly from tweets. Down the road, Twitter could link credit cards to user accounts, essentially allowing for ‘in-tweet’ transactions.

And not to be left out, there are rumblings that Facebook will add a ‘buy’ button to enable users to purchase products from businesses without ever leaving the Facebook app. And during a recent earnings call Mark Zuckerberg said there will be some overlap with payments and its Messenger texting service.

But while these features might be new and interesting, loyalty still seems to be the gauge that determines whether a mobile payment scheme flourishes or flounders. The gold standard is still Starbucks, which gives free drinks and food with frequent use and other perks such as free refills while in a café. PayPal is starting down this road of incentives, and Twitter, Facebook and others such as Apple – which is expected to roll out a mobile payments system later this year – have to ramp up their arguments for why users should select their method of mobile payments over anyone else.

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About Anita Karve 37 Articles
Anita is a writer and editor with 20 years of experience covering just about everything in the technology space with a focus on computer networking and telecommunications. She was managing editor of Billing & OSS World magazine and technology editor at Network magazine and most recently was in charge of newsletter coverage at TM Forum.

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