8 Big Stories Transforming The Payments Landscape
6. Mobile P2P: U.S. Lags Behind
Asian markets lead the way when it comes to mobile money movement.
The U.S. is in many ways an innovative and leading market for some technologies, but mobile payments -- especially mobile person-to-person (P2P) payments -- aren't among them.
"The U.S. is near the bottom," says Paul Schaus, president and CEO of CCG Catalyst Consulting Group. "You could almost pick any Third World country and they are ahead of us because their infrastructure is newer than ours."
Although Javelin Strategy and Research estimates that the total volume of mobile P2P payments in the U.S. this year will be $7 billion, this is small compared with other markets.
According to Schaus, the infrastructure issue is key. In the U.S., financial institutions have decades of legacy systems to deal with, while the vastness of the geography makes it difficult to create the wireless infrastructure necessary to facilitate widespread mobile payments.
While European countries by and large suffer from the same challenges, Schaus points to Asia as a leader in this area. He specifically mentions South Korea as a market where mobile money movement is a common way of life. Part of that, he says, may be due to the "tech influence" of the country, as it is home to Samsung and other major technology companies. Another factor is the relatively small size of South Korea, which makes it easier to build the technology infrastructure needed, he says. Australia and Singapore are other markets that Schaus points to as leaders in mobile and P2P payments.
"I'm always impressed by the adoption rate in the Asian markets," he says. "In places where the infrastructure is really new, it's much easier to do this." — B.Y.