Mobile payment, in other words payment by smartphone, is a relatively new phenomenon. But did you know that it has been possible to use mobile phones to make payments for 17 years? As early as 2001, Sydney train station had machines on which you could pay for drinks by text message, with the amount being charged to your telephone bill.
Mobile payment in Europe
How do people use smartphones for payment in Europe nowadays? According to a survey by ACI Universal Payments, Spain led the way in this respect in 2016, with 25 % of consumers regularly paying by smartphone. Mobile payment was also common in Italy (24 %) and Sweden (23 %) in 2016.
Growth in the US and Asia
More and more people are paying by smartphone outside Europe, too. In the US, the proportion rose from just 6 % in 2014 to 17 % three years later. Even more progress has been made in Asian countries: in 2017, 56 % of Indians regularly paid by smartphone, while the figures for Thailand and Indonesia were 51 and 47 %, respectively. Unlike here, payment by card has never been widespread in these countries, so consumers simply switched directly from cash to mobile payment.
Africa – the mobile payment continent
In Kenya, M-Pesa has been used for smartphone payments since 2007. Today, the app has 30 million users in Africa. Many people who have never had a bank account now pay their bills by smartphone or send their relatives money by app instead of cash.
Impressive figures from China
Mobile payment is very popular in China, too. Smartphones are used to make payments 11 times more frequently than in the US, usually in AliPay or WeChat Pay by scanning a QR code with the smartphone. Almost 65 % of smartphone owners frequently used them to make payments in June 2017. AliPay belongs to the Alibaba Group, which in turn owns two of the largest online shops (Taobao and Tmall). WeChat Pay is owned by the chat app WeChat. Both had a considerable interest in their customers paying by smartphone.
A popular app from Danske Bank
It is not just chat apps and online shops that have launched successful mobile payment apps – so have a number of banks. In Denmark, 50 % of the population already uses Mobile Pay from Danske Bank to make payments. The app was launched in 2013 and had already accumulated 500,000 users after just four months. Three years later, some three million Danes were making payments with Mobile Pay, and that figure has now risen to 3.7 million. The development of Mobile Pay was actively promoted by the Danish government. Businesses in Denmark are no longer compelled to accept cash as a payment method, for example.
Increasing usage in Switzerland
And what is the situation in Switzerland? A development such as that in Denmark is yet to occur here. According to estimates, just 0.2 % of payments in Switzerland are made via a smartphone app. There are several reasons for this. Firstly, cash is very popular in Switzerland. Secondly, it takes time for new technologies to become widespread – it took almost seven years for contactless payment by card to become established in Switzerland, for example. And thirdly, the distribution of TWINT in the retail sector is not yet complete. Coop supported this solution from the outset, while at Migros, it has been possible to make TWINT payments via the Migros app since March 2018.
This might also interest you:
- Konstantin von Radowitz, Lead Partner for Consumer & Industrial Products at the consulting firm Deloitte Switzerland, in an interview with TWINT: twint.ch/smartphones-replace-wallets
- Simon Zwahlen represents Swisscom as the VP of Business Development in Silicon Valley: twint.ch/twint-excellent-starting-position