Can mobile payment will succeed in the United States?

Can Mobile Payments Succeed In the United States?
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Abstract
Mobile payments refer to a method of a consumer making Mobile payments are attracting the attention of financial institutions and banking industries, but there is still a challenge in their success in the United States. The Mobile Payment Forum (2017) defines mobile payment as a transaction with monetary value that is initiated and completed over a smartphone, PDA, or any other mobile device over a cellular network. In this paper, mobile payment will be used to refer to the making of payments over cellular networks in exchange for goods and services. The paper focuses on finding reasons why mobile payments lag in the United States and conclude that mobile payments can be successful if all stakeholders involved introduce changes in influencing the attitudes of consumers. The stakeholders in the industries are mainly the consumers. One of the main challenges that marketers are facing is to change the mindset of consumers to embrace making payments over their mobile phones entirely. According to the findings from Pew Charitable research (Becker, 2016), the mobile payment commands only forty-six percent of the United States overall market. This statistical data is wanting, considering that about seventy-percent of the total U.S population own smartphones.
Can Mobile Payments Succeed In the United States?
Introduction
The introduction of technological transformations has created a wave of changes in consumer behavior as well as the manner in which businesses are responding to consumer needs. One of the changes has been in the way in which consumers pay for goods and services. Mobile manufacturers and developers of mobile applications have been at the forefront of offering consumers with a range of options when it comes to the use of mobile payments. Consumers in countries like China and countries in Africa have made an excellent response to the technology of mobile payments. The advantage of mobile payments is that they tend to focus on inclusion by reaching out to people in rural areas and those that do not have access to banks. While it is true that these advantages can cause a significant transformation in the financial sector, the United States has made a slow response to these changes. Scholars attribute the slow response to the established payment mechanisms and banking infrastructure that consumers have adapted over time. The United States lags in the use of mobile payments, but there is still room for the country to embrace mobile payments.
Reasons Why the United States Lags in the Use of Mobile Payments
Before delving into understanding how the U.S population can embrace mobile payments, it is crucial that one understands the reasons why most Americans have remained reluctant to appreciate the technology of mobile payments. One of the reasons is based on the tradition of credit card and debit card payments and the psychology behind it. Traditionally, most Americans have adopted the use of credit cards and debit cards (Becker, 2017). Compared to countries that have embraced the use of mobile payments in Africa and China as a whole, the United States was the first to welcome the use of credit cards and debit cards in making payments. Countries that did not have modern methods of making payments have overtaken the United States because Americans had already adopted a secure and trustable way of making payments. As a result, it has become difficult for businesses to shift people that have already approved the use of credit and debit cards to start using mobile phones to make payments. Consumers take time to trust mobile payment systems, especially considering that the United States has suffered data bridges in the recent past. Mobile phones have access to a lot of private information such as contacts, text messages, and locations. The United States has been a target for online hacking in the recent past. Consumers have not developed confidence in business people, because there are no uniform cellular networks or businesses that require mobile payments. Consumers are afraid of leaving traces of their private data everywhere and are still scared that app developers could misuse the information.
Offers and promotions are among the things that consumers look for when making a payment option decision. Debit cards and credit cards have traditionally proved reliable in the manner they have provided loyalty points that can be easily redeemed and used to make payments. Mobile payments are still new in the market and have not earned the trust of consumers. Clients are sensitive and will always want to win the value for their money. Most mobile payment options still lag in embracing these changes.
Additionally, even when one was to consider that mobile payments could be freely available and accessible; the process of using this option is still not seamless. A debit or credit card only requires that the client swipes the card to make payments. Mobile payments, on the other hand, need that the client navigates to the app, manually enter the amount on the screen, inputting the security pin, and confirming the payment. This alternative is quite procedural and time-consuming compared to swiping the card at the counter, and everything is completed within a few seconds.
Factors for the Success of Mobile Payments in the United States
After understanding the factors that have made it impossible for mobile payment systems to reach a full scale in the United States, one can then focus on how to make the system useful and productive. One of the ways to implement a successful method is to start by looking into how the stakeholders have embraced the technology of the mobile payment. The primary stakeholders in this industry are the merchants, consumers, app developers, and the government on the side of providing regulatory measures. According to Fonte (2013), each of the stakeholders has a unique role to play in making sure that mobile payments take a full swing.
Consumers are the recipients of mobile services, and they are the principal determinants of the success of this industry. They are mainly responsible for making purchase decisions and payment decisions. They are also the ones involved in deciding whether to use their mobile devices for payment or to use credit cards or debit cards to make payments. All other stakeholders in the industry have a role to play in influencing the purchase and payment behavior of the target client in the industry. To make this effective, the stakeholders have to identify the target market to channel the marketing technique. Anderson (2018) recommends that the marketing strategy has to target the millennial population. The reason for opting for this population is to create a culture that will rely on mobile payments for a longer period, especially considering that it has proven difficult to change the payment habit of the American population. Young people are also more social comparing to the aging population. It becomes possible to market and inform the millennial population since it is easy to target areas where they can be found. Hernandez (2017) mentions that Uber has made a revolution in the taxi industry due to identifying and concentrating on the target market. Today, it is possible to influence the upcoming generation by reaching out to them over the internet and other social networking sites.
Merchants have a unique role in influencing the purchase behavior of consumers. They are the ones in the direct contact with clients and can collect information and provide it to app developers on challenges that consumers go through in the process of making payments. They can liaise with the network service providers and introduce offers and promotion codes that can influence the behavior of the clients at the point of sale. Additionally, Raina (2014) mentions that merchants have a unique role to play when it comes to security and privacy of data that they acquire from clients when there is an exchange of data and information. The first thing that an American consumer wishes to know is the security of the information that he shares over the network. Definitely, in cases where a merchant has not won the trust of the client, it becomes nearly impossible for the merchant to gain the trust and confidence of the client.
Merchants are also concerned in the speed of payment and immediate settlement of payments from clients. Real-time payments can win the trust of merchants and encourage them to market to potential clients on the need to shift to mobile payments. They are also concerned about the costs of transacting or transferring the amount that the client has paid. Their acceptance of mobile payments depends on the value proposition. According to Gupta (2014), no merchant wishes to sh...