Overdrive Services

Is Mobile Payment the Next Big Consumer Marketing Tool?

posted by Melanie DAcchioli @ Monday, October 5, 2009 - 4:46 PM

Mobile apps have become a staple of the marketing industry. Users are so connected to cell phones, PDAs and smartphones that advertisers have quickly learned that the way to get peoples' attention is inevitably to get into their mobile phone.

The newest piece of technology to start gaining traction in the mobile application world is the payment function. Mobile payment allows a cell phone or PDA to essentially replace a credit card; however, unlike the impersonality of a credit card, using a mobile payment option allows marketers to really generate a conversation with their target audiences, by providing promotions, coupons, and a method of payment right within each person's most important and inseparable piece of personal property. Much like online marketing became extremely powerful as computers and laptops became more prominent, mobile marketing is now a fast-growing, effective medium for marketers to utilize to break through the clutter.

The technology required to deploy mobile payments involves implanting a chip into phones that contains consumers' credit information. The difficulty and expense of implementing this technology is a major hurdle that needs to be overcome in order for mobile payments to really infiltrate the marketplace. However, according to AdAge, Juniper Research predicts that 123 million NFC-enabled handsets (46% of today's U.S. wireless subscribers), will come online in North America by 2013. Additionally, Dublin-based Research and Markets predicts that global mobile payment transactions are expected to reach $110.1 billion in 2013, at a 105% compound annual growth rate.

Mobile payment has been in use in Japan for about 4 years, and is just beginning to enter the U.S. in a few test markets of companies such as McDonalds and Starbucks. The ultimate reason for the growth of this new function in the marketing world is the ability to track customer behavior. According to Drew Sievers, CEO and cofounder of mFoundry, which supplied the technology that powers Starbucks' mobile payment feature, explained to AdAge, "If you've got a real-time device in the users' hands at point of sale, this gives you the opportunity to provide promotions and incentives at the time it matters and influence buyers' behavior."

You can check out the full AdAge article about mobile payments at http://adage.com/digital/article?article_id=139439

Labels: Application Development, Mobile Marketing