More than a trillion dollars will be spent around the world using mobile devices by 2017, according to IDC Financial Insights, although this will still represent only a drop in the commerce ocean.
It's the end of physical cash as we know it. The internet, Visa PayWave, Mastercard PayPass, the mobile phone, virtual wallets, e-receipts, e-vouchers and e-discounts, the continuing develpment of computer technology and payment technologies, and the will
participation of banks and governsments will consign physical cash to history. When will this happen? Who knows! But it will happen, nontheless.
Ah, after months of voicing this view, it feels good to know that someone of the stature of IDC also believes that mobile payments will run on banking rails and not disintermediate financial institutions, even five years from now.
Now that it's amply clear that banks and credit card accounts aren't going away anytime soon, banks already carry a sizable inventory of offers from merchants and already earn some revenues through their current, and arguably, "spray-and-pray" type of campaigns.
Mobile payments will help them target their offers better and hopefully boost conversions. It remains to be seen whether the incremental revenues they gain as a result will by itself nudge them to share a slice of their interchange fees with mobile wallet
providers, who otherwise don't seem to have any concrete source of revenues.
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© Finextra Research 2014