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How the years fly by! In the mobile and payment industries, a month is a year in “normal” earth time. So based on this rapid and ever changing mobile payments market, I have tried to capture that “pace” in the 2013 predictions. I hope you enjoy and whether you agree or not, the purpose of this article is make you really think through the dynamics of the market and how you and your organization fits. As I am actively seeking real life viewpoints and experiences, please contact me to discuss your situation or to provide me with your valuable insights.

My CUP Runneth Over

By the end of 2013, China Union Pay (CUP; founded in 2002, the only bank card organization in China) will become even more well known in the US and continue its growth path by adding more strategic relationships outside of Citibank and Discover. In fact, the relationship with Discover currently does not support “card-not-present” transactions and the prediction here is it will support mobile/digital transactions by the end of 2013. CUP represents intriguing “co-opetition” for Visa and MasterCard given the sheer size and increased economic power of the global Chinese presence.

Micro will Gain Weight

Mobile transactions have been dominated by micro-payment transactions for digital goods. But with the death of Premium SMS and the non-carrier commerce world getting into the game, we will see (1) the average mobile transaction size increase due to mobile payments having a more balanced mix of digital, services, and physical goods and (2) US Wireless Carriers, like many of their brethren internationally, will begin to accept certain “service” payments such as train, bus, and taxi. The carriers need this type of higher margin revenue to pay for their massive infrastructure costs for 4G/LTE.

Fastest CAGR is ToGo

Just like Starbucks, other hospitality and food service companies will realize the pent up demand for consumers’ desire to pre-order while on the go. The prediction is that ToGo mobile ordering will represent the fastest growing segment for mobile payments in 2013.

In Motion Purchase Index

I have many years’ research and development focused on “in-the-moment” digital to human persuasion and motivation that relate to commerce; so let’s have some fun and predict that Visa/MasterCard will begin to track payments that are made while people are “mobile in-motion” including in-store mobile transactions vs. sitting at a desk and ordering via ecommerce. This is an intriguing sub-set of mobile payments that should be the centerpiece for many loyalty programs but loyalty and CRM professionals do not understand the different art and science of motivating people on the go vs. ecommerce strategies. My recommendation is to start building “day in the life” behavioral commerce models into your marketing and loyalty programs. .

Apple will shrink the BIG BITE

Apple has chosen to take a nice chunk of transactions (30%) that are executed via the approved apps that are on their devices. This is not a sustainable position in the market as most organizations and industries do not have the gross margin to give Apple a big chunk of the payment. And given the penetration of Droid combined with other excellent smartphone mobile wallet solutions, I believe Apple will have the good sense to either remove or significantly reduce this “mobile tax”.

In summary, continue to expect a rapidly moving mobile and payments market with a few consolidation plays and surprises.

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