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Mobile payment compatibility issues

Sep 05, 2012 Dave King

The merchant services sector has been widely transformed in recent years, mostly because of the rapidly increasing popularity of electronic payments. However, some questions and concerns remain pertaining to the associated technology, such as security of personal banking information in electronic transactions. The question of compatibility
The Associated Press recently reported that mobile payments need to figure out how to improve compatibility across the board, as certain devices do not work with specific systems on the merchant services end. According to the news provider, encryption practices have led to better security, maybe even surpassing credit cards, in recent months, though compatibility remains a big problem. While the advent of such systems in many ways improved the ease of transactions on the consumer's end, the author of the AP article asserted that there are widespread issues in practice. He decided to try out the four most popular mobile payments systems, and found problems both in the device itself and when trying to carry out transactions at a point of sale terminal. According to the news provider, there are compatibility issues between the apps that carry out the transactions and the hardware that hosts them - such as smartphones - while some mobile payment-enabled POS terminals will accept certain mobile wallets and not others. Pushing the popularity with improved compatibilityGartner recently forecast mobile payments to increase close to 62 percent this year, reaching $171.5 billion in transactions compared to the $105.9 billion logged last year. This represents a huge move in the payment processing sector, though with issues like those the AP pointed out, growth can be curtailed by malfunctioning devices and applications. Gartner further asserted that mobile payment growth will continue on a torrid pace over the next four years. "We expect global mobile transaction volume and value to average 42 percent annual growth between 2011 and 2016, and we are forecasting a market worth $617 billion with 448 million users by 2016," Sandy Shen, research director at Gartner, explained. "This will bring opportunities for service and solution providers who will need to cater to the local demand patterns to customize their offerings." Merchants should ensure that they are choosing the best systems that accept the widest variety of mobile wallet payments, as the statistics around show that consumers clearly prefer using mobile payments.