How to Make Processing Mobile Payments Look Easy (It Isn’t)

John Knuff

digital-payments

Apple Pay says you can use it to “easily pay with your debit cards and credit cards with just a touch.”

Android Pay says you don’t even need to open an app: “Tap and pay is that fast, that easy.”

PayPay, meanwhile, says using its app at the register “is almost as easy as waiting for someone to count out your change.”

This whole mobile payments thing sounds pretty “easy.” But easy for whom?

The consumer, yes, because it has to be. But for the players in the digital payments chain, delivering a reliable mobile payments experience isn’t easy at all.

A mobile payment needs the capability to bring together at least four vastly different industry ecosystems in the span of a few seconds in order to be as fast, smooth and secure as users expect. As the demand for mobile payment services and end user expectations increase, the behind-the-scenes orchestration becomes even more complex, with dozens of participants becoming part of the digital supply chain.

cta-payments

Ovum predicts that by 2018, nearly 5 billion people worldwide will be engaged in using mobile payments. Statista forecasts that over the same time period, the total revenue volume of mobile payments across the globe will surpass $1 trillion annually. Mobile wallet providers need to make sure the hidden complexity of a single mobile transaction stays hidden from purchasers and retailers without compromising speed, security or adding more costs. Success or failure will depend on partnerships and seamless integration via APIs. Both incumbents and disruptive companies often need to work together for best-of-breed solutions. At Equinix, we think the best way to do that is through interconnection.

Making It Look Easy

Consider a few of the disparate ecosystems involved when someone pulls out a smartphone to pay for something:

  • Financial: Credit card-issuing banks, payment networks, banks that process credit/debit card payments
  • Mobile: Mobile device manufacturers, operating system providers, network operators
  • Retail: Point-of-sale providers, merchants.
  • Advertising: Companies that handle ad insertion, rewards, proximity/location-based offers and contextual awareness

Equinix believes mobile payments companies can deliver the best user experience by deploying IT right in the middle of the various ecosystems that must interact to make a mobile transaction happen. And we can bring them there. Our data centers host all the key players in these ecosystems, and we add the essential ingredient: interconnection. Direct and secure interconnection with each other brings the parties closer together for higher-performing connectivity and faster transaction execution.

As hot as the digital payments industry is today, demand for mobile transactions is only going to grow. Last week, I hosted a roundtable discussion with representatives of several of the industries that need to come together to make digital payments work. The event was part of Interdependence Day speaking series – sponsored by Equinix and organized by the Business Development Institute – and focused on interconnection within various industry verticals. We took a look at the landscape of the payments ecosystem, how real-time data analytics is affecting the industry, and what the payments industry can learn from Amazon, Google and Microsoft when it comes to architecting a customer network strategy.

We also discussed why payment industry leaders are migrating towards the same peering model that helped scale the Internet. We’re very familiar with that model at Equinix.

Consumers will reward businesses that seamlessly shift to mobile transactions, while others risk irrelevance. No one’s claiming it will be easy – the life of a digital payment is complicated. But we think the interconnection solutions available at Equinix will help companies make it look easy and realize the benefits of the accelerating mobile payments trend.

Read our white paper, “Interconnected Commerce: A Revolution in Value Creation,” to learn more about the evolution of non-cash payments and what we see ahead.