A Day in the Life of a Mobile Payment

According to an Accenture report, every 10% of cash payments and 10% of credit card payments migrating to digital payments represents a total of 300 billion transactions a year globally – with a combined value of $1.3 trillion. However, for something that aims to make people’s lives so much easier, there’s a lot of complexity behind the scenes. The diagrams below illustrate how the world of making consumer payments has transformed. What was a pretty straight line between the payer and the payee has now become a complex value-chain of global interrelationships and interconnections.

Traditional Banking View of Payments

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Today’s Complex Reality of Digital Payments

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Source: Accenture

Navigating the Mobile Payment Ecosystem

A single mobile payment transaction requires an unprecedented amount of interaction between distinctly different ecosystems. These interactions must be fast AND secure, requiring direct, high-performance, private interconnections among the various players:

  • Financial Ecosystem: Issuing banks, payment networks and acquiring banks
  • Mobile Ecosystem: Mobile device manufacturers, operating system providers and network operators
  • Retail (Enterprise) Ecosystem: Point of Sale (POS) providers and merchants.
  • Advertising Ecosystem: Includes companies that handle ad insertion, rewards, proximity/location-based offers and contextual awareness

chiaren3 The challenge for the players in each ecosystem is gaining the proximity to each other needed to effect that high-rate of transaction performance and security required to realize the full potential of mobile payments.

Interconnection Makes Mobile Payments Happen

The touch points among these ecosystems are critical to making mobile payments work. It is this complex web of interconnections among the financial, mobile, retail and advertising ecosystems that provide the instantaneous end-to-end service delivery that is expected by consumers and merchants alike.

At Equinix, we not only bring together individual players, we bring together ecosystems. We enable payment service providers, enterprises and traditional banking customers to come together by providing fast, continuously available data center and colocation services and scalable interconnection and connectivity platforms capable of meeting business needs (from storage, to networks, to clouds) while at the same time meeting compliance regulations.

From a security perspective, if you are directly connected to your partners without going over the public Internet, there is no risk of hacking. The more direct connections between each vendor and ecosystem, the greater the safety and simplicity behind each transaction, saving everyone in the value chain a ton of money.

Equinix’s Mobile Payment Ecosystem

Within Equinix IBX data centers, traditional ecosystems converge to enable mobile payments. We provide the interconnection capabilities required for the value chain of ecosystems to make a single mobile payment transaction happen, as well as the billions of transactions that Accenture predicts.

The Equinix benefits to companies/ecosystems within the mobile payment value chain include:

  • Enabling OmniChannel support, directly connecting to issuing and acquiring banks, payment systems and converging services
  • The widest range of network providers to simultaneously improve wide area network (WAN) performance and drive down costs
  • Access to content, services and communications links within a single PCI DSS Level 1, ISO 27001 facility, with the industry’s most reliable and safest connections
  • Expanding global reach via hundreds of fixed line and mobile networks, point-of-service (POS) providers and e-commerce sites
  • Direct connection into key components such as the Equinix Performance Hub and Equinix Cloud Exchange to minimize latency, flatten bandwidth costs and speed time-to-market for new services
  • Positioning for your infrastructure in the center of rising disruptive payment systems and converging services, such as ad-serving and behavioral targeting

Mobile payments are inherently complex and open to risks. But with a dense population of players and ecosystems in close proximity to each other, interconnected via secure, high-performance direct connections, the complexity can be totally seamless – making mobile payments easy enough to do with one finger.