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Expect chaos in nascent mobile payment industry

Brad Reed | March 15, 2012
Like most nascent tech markets, the mobile payment industry is likely to be defined by chaos in its early years.

"Until we get the consumer used to pulling out their mobile phone and paying, [the industry] is going to be fragmented," said Paradise. "It's very hard to drive the mindshare of the consumer to pull out their mobile phone to pay for something instead of a credit card."

All that said, Priebatsch expected that just three or four major mobile payment platforms would emerge once all the dust settles, just as right now there are four major credit cards in the United States. The economies of scale for merchants in only accepting the most popular mobile platforms are simply too strong to sustain a highly competitive payment platform market for very long.

"I think there will be three winners, maybe two," he said. "People don't necessarily want to have their data shared across multiple different networks and merchants certainly want to have access to the most widely-used platforms... The universe will start off incredibly large and will compress down to three to four different platforms that work at tens of thousands of merchants."


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