by James A. Martin

The state of mobile payments in 2015

Apr 22, 20159 mins
Consumer ElectronicsFinancial Services IndustryMobile

Thanks to big moves from Apple, Samsung, Google and others, the world of mobile payments is rapidly evolving. More retailers accept digital payments than ever before and these 11 tech companies — as well as the world’s most famous coffee chain — are leading the charge.

Mobile payments in 2015

Apple, Starbucks and Disney are all strong brands with loyal followings, but they also have something else in common: They’re early leaders in the ever-evolving mobile payments market.

Some analysts predict 2015 will be the first year all the pieces — including a larger base of NFC-enabled devices and terminals, and growing consumer acceptance — come together to take mobile currency mainstream. A number of additional companies are also entering the world of mobile payments, such as American Express, which you might expect to see, and Jawbone, which might seem surprising.

Here’s a high-level look at the current mobile-payment and wallet adoption levels, as well as a breakdown of

Mobile payments today

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Image by Deloitte

By the end of this year, 5 percent of the world’s 600 million to 650 million NFC-enabled phones will be used at least once every month to make “contactless in-store payments at retail outlets,” according to consulting firm Deloitte’s annual “Technology, Media & Telecommunications (TMT) Predictions” report.

While five percent is not a staggering number, it represents a considerable increase over last year’s mobile payment usage rate. As of mid 2014, less than 0.5 percent of the 450 million to 500 million NFC-enabled phone owners used their mobile devices for in-store purchases, Deloitte says.

While contactless mobile payments won’t go mainstream this year, “niche adoption” will continue to grow, according to the report. Down the road, mobile payments use via NFC-enabled devices should “rise steadily” as consumers become more familiar with the concept and banks and retailers readily accept mobile payments.

Mobile payments tomorrow

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Image by Forrester Research

U.S. mobile payments to national brands and local merchants will grow from $52 billion in 2014 to $142 billion by 2019, according to a 2014 Forrester report. “The adoption of mobile payments is an evolution — not a revolution — and the evolution is well underway,” Forrester says. (Forrester’s numbers includes in-person mobile payments as well as remote and peer-to-peer payments.)

Capgemini’s “World Payments Report 2014” suggests mobile payments will increase to 47 billion transactions through 2015, up from 29.2 billion in 2013.

And according to Gartner, “rampant interest in mobile payments” and a “significant increase in mobile commerce” will drive mobile commerce revenue in the United States to represent 50 percent of all U.S. digital commerce revenue by 2017. Mobile commerce currently represents 22 percent of all digital commerce, Gartner says.

Amex on Apple Watch, Jawbone UP4

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American Express is experimenting with facial recognition and wearable technology that could form the foundation for new mobile-payment and security features, according to The Wall Street Journal. Amex tests new ways of using its payment services on devices such as the Apple Watch and Google Glass in its own tech development lab. The company is evaluating facial recognition as a more secure way for mobile consumers to use Amex when paying for goods or sending money transfers. However, the technology isn’t ready for prime time and is still in early testing phases, The Journal says.

Amex also recently partnered with Jawbone to add mobile payment features to the company’s upcoming UP4 fitness tracker.

Pay attention to Apple Pay

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The Apple Pay mobile-payment and digital-wallet system debuted in October 2014. It lets consumers with NFC-enabled iPhone 6, iPhone 6 Plus, and Apple Watch devices pay in stores at contactless terminals and buy goods using apps that support the service.


Apple Pay’s impact was significant and immediate. Apple said more than a million credit cards were registered for use with the service in its first three days of availability. Apple Pay “will influence every discussion of mobile payments through 2015,” says Denée Carrington of Forrester Research. “Apple Pay will be the catalyst for new debates on balancing data privacy with customer engagement and loyalty” and will be “the standard-bearer for the best use of tokenization to secure payments and biometrics to combat fraud.”

CurrentC coming summer 2015

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CurrentC is expected to be available in mid 2015, and it will combine mobile payments and loyalty benefits. Merchant Content Exchange (MCX), a company owned by a consortium of U.S. retailers including CVS, Best Buy, Lowe’s, Sears, Target, and Walmart, backs the CurrentC platform. 

Small-scale trials are currently underway in undisclosed U.S. markets, according to IDG News Service, but some critics express doubts about CurrentC. “MCX seems completely unaware of how people actually shop at its partner stores,” Forbes says. CurrentC doesn’t support credit cards, to help merchants avoid those fees. Instead, CurrentC uses debit cards, which don’t provide the same level of fraud protection as credit cards. The system will also initially use QR codes instead of NFC or another wireless technology.

Disney ‘MagicBand’ at the Magic Kingdom

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“If you want to imagine how the world will look in just a few years … skip Silicon Valley and … (go) to Disney World,” according to Wired.

Disney World guests can wear a “MagicBand,” a waterproof, plastic wristband that contains a short-range RFID chip and a 2.4-GHz wireless transmitter. MagicBand is also a mobile payment system, and it lets guests at Disney resorts purchase food, beverages and merchandise, and gain admission to attractions.

“You don’t need to carry cash, because the MagicBand is linked to your credit card,” Wired says. “You don’t need to wait in long lines.”

Apple Pay lifts Google Wallet

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Google Wallet, a mobile-payment and wallet system that uses NFC to enable payments between compatible devices and point-of-sale (PoS) readers, was released in 2011. However, the system failed to gain traction, partially because some wireless providers supported the then-rival Softcard payment system, previously (and unfortunately) known as Isis.

In February 2015, Google acquired Softcard, integrated it with Google Wallet and announced its Wallet app would be preinstalled on compatible devices from AT&T, T-Mobile and Verizon Wireless later this year. You can use Gmail attachments to send money from your Google Wallet, too, even if the recipient doesn’t use Gmail. Apple Pay’s success ironically ignited interest in Google Wallet, and today more stores accept NFC payments from both competitors.

Jawbone, UP4 and Amex

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Jawbone, which makes fitness trackers, portable speakers and other consumer electronics, recently entered the world of mobile payments. In mid April, the company announced that its upcoming UP4 ($200) activity-tracker wristband would let wearers make contactless payments via pre-registered American Express cards at PoS terminals this summer. UP4 will use Jawbone’s app to link Amex cards to UP4 for NFC wireless payments. (Microsoft Band is another wearable with some mobile payment capabilities.)

For UP4 transactions, Amex will provide retailers with tokens instead of consumers’ credit card numbers, according to PC World, and Jawbone says it won’t store credit card numbers or receive sensitive data about user transactions.

‘Microsoft Payment,’ Windows 10 and ‘tap to pair’

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Microsoft will likely enter the mobile payments space in a big way. Here’s the gist of what’s known so far, according to The Motley Fool: The payment platform may be called “Microsoft Payment;” the company filed official forms to become a money transmitter in the United States and already received permission to act as one in Idaho; and Windows 10’s “tap to pair” feature could be used to transmit payments via NFC.

From PC World: “For now, we can only imagine what Microsoft might do. Perhaps the company is cooking up a direct mobile payment competitor to Apple Pay — though any effort on that front may be hamstrung by Windows Phone’s meager adoption.”

Microsoft’s Band wearable already lets you pay for goods at Starbucks.

PayPal, Paydiant and mobile payments

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PayPal has been an ecommerce force for years. In March, news broke of PayPal’s plan to acquire startup Paydiant, a platform that companies use to build branded mobile-payment and loyalty-card services. Subway, Capital One and retail consortium Merchant Customer Exchange (MCX) already use Paydiant’s platform, according to the IDG News Service. Paydiant lets consumers pay for items via their mobile devices using NFC and QR codes.

PayPal also said in March that it would sell NFC-equipped versions of its credit card readers to merchants.

Samsung Pay, NFC and MST

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In March, Samsung announced Samsung Pay, which uses two different wireless technologies: NFC and magnetic secure transmission (MST). Startup LoopPay developed the latter, which has been embedded as a copper ring inside the new Samsung Galaxy S6 smartphones, according to Computerworld.

Samsung Pay is expected to be available in the United States and South Korea this summer. The system’s support for NFC and MST means Galaxy S6 users will be able to make purchases at many more retail locations than Apple Pay users, because Apple Pay requires NFC-enabled terminals.

“Samsung Pay certainly heats up the competition,” Avivah Litan, Gartner analyst, told Computerworld. “But Samsung still has a lot of work to do to improve the user experience before it can effectively compete with Apple.”

Hip to be Square for mobile payments

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Square’s PoS card readers are already a hit with small businesses, including food trucks, restaurants and other local retailers. The Square Wallet mobile app, introduced in 2011, didn’t catch on with consumers, however, so the company pulled it and replaced it in 2014 with Square Order, an app that lets people preorder drinks and food from local vendors. Then in March 2015, Square shut down that app, too. The company currently focuses on its Square Cash peer-to-peer mobile payments app for consumers and businesses, as well as its various PoS systems for merchants, including the Square Register app.

Starbucks leads by example

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Wired says Starbucks is “the master of mobile payments.” A Forbes headline says “Once Again, Starbucks Shows Google And Apple How To Do Mobile Payment.” So what’s the big deal?

The coffee chain says it nabbed as much as 90 percent of the $1.6 billion spent in U.S. stores via smartphone in 2013. CEO Howard Schultz says the company’s loyalty program drives mobile payments. Coffee drinkers purchase Starbucks cards, load them with funds from a credit card, then scan barcodes in the Starbucks app or iOS Passbook wallet to pay for food and drinks at its cafes. The more they buy, the more points they earn toward freebies.

Starbucks is also reportedly testing beverage delivery (via the Postmates service) as an extension of its mobile payment offering.