Online Payment Marketplace

1. Introduction

Online payment method has profound influence on our daily life. Whether you are a buyer or a seller, and no matter how big or small you business is, you can benefit from it. Online payment method offers many advantages to users; as a result, more and more users are using it. As the market becomes increasingly lucrative, more and more players are joining the game to compete for huge potential revenues, which creates “goat rodeo” situation. Nearly everyday, a new online/mobile payment system is announced. 

 

2. A Pie Which Everyone Wants A Share

Many companies in many fields are fighting to dominate the online payment marketplace: mobile hardware and software, PayPal, credit card companies, telecommunication carriers, large retailers… Over the past few years, a significant number of people started using their mobile phones to shop has created the mobile payments sector, which is growing by over 50% annually, much higher than average growth rate of e-commerce of 20% and offline commerce, only 2%. PayPal is currently the largest alternative online payment service, accounts for 78%. However, in the mobile payment marketplace, PP only has 30% of the overall mobile payment market, still a small player because they are beaten by a start-up firm called Square. Square produce card readers plugged into smart phones and tablet using Square app to process credit card information. Another potential in the next few years are based on NFC, it enables a direct secure communication link between smart phone and card register. There are also vast differences in global payment methods, each country prefer one type of online payment and they also have local companies compete with international companies. Thus, it is really hard to admit that an online payment method can have ultimate power.

3. Government E-Payments Adoption

Many governments have improved the efficiency and reach of their e-payment infrastructure in recent years despite of financial crisis effect. By means of this, governments can gain tremendous benefit from these services and spur their continued growth. The governmental sectors of which e-payment can be applied include four main categories:
1. Citizen-to-Government (C2G)
2. Government-to-Citizen (G2C)
3. Business-to-Government(B2G)
4. Government-to-Business (G2B)

4. Trends of E-Payment & Lessons
It is important to recognize that e-payment is not just another shiny new object attracting temporary fascination, only to be discarded like yesterday’s augmented reality experiment. By the end of 2017, Forrester Research predicts that U.S. Mobile users will spend $90B via mobile payments, a 48% increase over the $12.8B spent in 2012. Mobile payments are revolutionizing how consumers spend online, and 50% of current smart phone users say they will use their mobile wallet for daily transactions as early as 2016. With more tap-and-pay devices coming on to the market, analysts are predicting that e-payment will be a mainstream consumer activity within five years. So, here are the three key lessons-usability, technology and standards that the financial institutions, technology companies and connectivity players must address to fulfill the potential of this new market.

References

Laudon,K&Traver,C. (2013). E-commerce 2013, CourseSmart eTextbook, 9th Edition. Prentice Hall

The Economist (2011) ‘Government E-Payment Adoption Ranking’, The Economist, Available from:

http://corporate.visa.com/_media/2011_GEAR_Study_Final_Report.pdf [21,October,2013]

Vuuren, C. (2013), ‘Connecting With Customers: The Future Of Mobile Payments’, Forbes. Available from:

http://www.forbes.com/sites/groupthink/2013/08/13/connecting-with-customers-the-future-of-mobile-payments/[21,October,2013]