Disruptive new technology or business models in the payments industry are now kicking serious butt. A new report says social media and mobile messaging application providers have turned everything upside down.
Well regarded Boston-based Mercator Advisory Group’s latest research note, Social Media and Mobile Messaging Providers’ Payment Apps: More Than Just P2P, examines the popularity and potential opportunity for social media and messaging companies looking to provide payment services globally.
Historically, new players have started by offering “basic” payment services like person-to-person (P2P) money transfers, but these market entrants have developed payment services that provide consumers a more comprehensive solution.
The more robust solutions come from the Asia-Pacific region, in particular from Japan, South Korea, and China. This research note looks at their popularity and opportunities in the region more specifically. The note also describes different solutions available today and their implications for the banking and payments industry.
Mercator says consumers are notoriously fickle about social media and mobile messaging services, traditional payment service providers might be quick to underestimate the potential impact these players might have in the payments industry. Even though some of these new providers may fail to generate the momentum to become serious players in the payments market, traditional payment service providers should not become complacent and ignore the potential of these new players. In fact, traditional providers should take this opportunity to seriously consider how to work with these players rather than attempt to compete or defend against their rise. In the current digital environment, social media and mobile messaging services play a critical role in consumers’ lives, as they will likely continue to do in the future. Thus, understanding how to work with and utilize their services is very important for traditional payment service providers to be successful over the long run.
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