US retailers team up for mobile payments – Rumour

The retailer collective

More than 20 retailers in the US are reportedly joining forces to create their own mobile payments system, as competition in the space continues to increase. A Wall Street Journal (WSJ) report claims that firms such as Wal-Mart and Target will be part of the payments system, pitching the retailers into a market already crowded with tech giants, banks, existing payments firms, carriers and card companies. It appears the retailers are looking to fend off services such as Google Wallet and carrier joint venture ISIS, while also tapping into a fast growing and potentially lucrative sector.

Speaking to the WSJ, the US consulting firm that is helping the retailers build the system says that the merchants felt they could “build a better system” than those already on offer. Further details about the new system are not yet available, but the interest of consumer-focused businesses suggests that mobile payments are now finally moving towards mainstream validation. Indeed, the retailers’ competitors view the competition as a positive development, suggesting that more players will be necessary to persuade consumers to use the technology.

Despite analysts over the past few years predicting that the mobile payments market is set to hit the mainstream, the concept is only really beginning to take hold in consumers’ minds now. A KPMG survey suggests that mobile payments will become mainstream next year, while Juniper optimistically predicts the global market will be worth USD670bn by 2015.

However, much of the success of mobile payments will depend on players educating consumers around the different forms of mobile payment and winning their trust – something retailers may be in the strongest position to do, with consumers already trusting stores with financial transactions. As yet, it is too early to tell whether Google’s entrance into the market is successful, but the recent exposure of a hack which reveals a user’s PIN may add to existing consumer cautiousness. In the UK market, awareness around NFC-driven payments is still low, while even tech-savvy consumers remain highly wary of contactless payments.

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