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Over the past few years, the sharing economy has gone from something that a few tech-savvy idealists were excited about to a fundamental part of our everyday lives. Companies such as Uber, Airbnb, and Instacart, have all ridden this boom to become massive companies with global operations. Interestingly, they’ve brought mobile payments technology with them.
That’s hardly surprising. Many of these companies depend on customers being able to make reliable mobile payments in order to survive. And when you consider PwC’s estimate that the global sharing economy will grow from US$15 billion in 2013 to US$335-billion in 2025, you get an idea of just how much potential growth there could be for mobile payments tech in the same period.
Speaking this week at the WBS PayTech Conference, Dr Pinar Ozcan, Associate Professor of Strategic Management at Warwick Business School, explained just how intertwined the two areas are.
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“Calling for a taxi through Uber or booking a room on Airbnb or even finding the nearest car repair shop all involves apps,” he pointed out They are doing business from peer to peer and bypassing companies and it is all done through mobile payment technology.
“This all happens on the mobile phone, it is the device where you book all these things, and the app allows you to send a payment with one click.
As things stand, the professor says, Apple Pay, Google Wallet, and PayPal have the early advantage. He did however note that there are “many smaller players with great innovative products in the sector.”
According to Dr Ozcan, the recent growth in mobile payments tech is great, but could have happened much sooner were it not for internal squabbles among banks and technology companies in the West.
“It has been recognised since the early 2000s that Near Field Communication (NFC) was the preferred choice of technology to get the mobile payment industry rolling,” said Dr Ozcan. “But mobile operators needed access to bank accounts, while banks, in turn, needed mobile operators because the user’s bank information and the payment software needed to be integrated into the mobile service of the user. But wrangling over who dealt with – and essentially owned – the consumer resulted in it being delayed.”
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She also believes that the launch of Apple Pay was a major factor in kickstarting interest in a technology which had stood still for the best part of decade.
“Now that Apple has joined them, the fact that two big technology players are backing the payments system on their devices will certainly help with more widespread adoption issues,” said Dr Ozcan. “One interesting difference between Apple Pay and Google Wallet, though, is that Apple won’t have any access to information about what users buy or how much they paid. Google, on the other hand, ‘sees’ every transaction that a user makes.
“One thing that Apple has done right is to use its reputation as a top technology firm and platform provider to strike deals with the industry leaders in banking and mobile communications to finally get them to co-operate. When a company like Apple gets behind a technology, nobody wants to miss that boat.”