Why do we still have credit cards (or cash)? The future of mobile payments

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By Juma Weeks

Many technology companies are considering how to enter the mobile payment market. Credit cards will, in a few years, be a thing of the past as mobile phones become the primary way to pay for goods and services. This article considers the key competing technologies and the legal risks, and how the adoption of these technologies may shape the payments market of tomorrow.

The need to consider mobile payments becomes clear as payments using mobile smartphones have increased exponentially year on year. Some reports claim that such payments now account for almost 20 per cent of all consumer transactions processed worldwide (Adyen, Mobile Payment Index, 30 January 2014). While the exact number of mobile payments remains uncertain, Capgemini and the Royal Bank of Scotland estimate that mobile payments — or ‘m-payments’ as they are known in the industry — will grow at a rate of 58.5 per cent annually, reaching 28.9 billion transactions in 2014 (World Payments Report, 2013). These figures clearly demonstrate that consumer appetite is high. What is yet to be determined is which technology will lead the way and therefore which provider(s) will benefit.

There are several primary choices emerging in m-payment technologies…

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