CIOs told to gear up for mobile payment revolution

Smartphones will replace bank cards, according to research group

Mobile phones are set to replace bank cards in retail stores

Smartphones are likely to overtake bank cards as a preferred payment form, according to a new report from research group Lafferty.

The report predicts the next technological advance in banking will see mobile phones that harness the internet and intelligent banking applications used to pay for everyday items.

“The idea is to use your phone as a mobile wallet,” explained Ronan McCaughey, editor at Lafferty Retail Banking Insider.

“It’s much faster - you just tap your phone and go. The technology is there to do mobile payments, now it’s about getting it rolled out commercially.”

He advised CIOs at companies that engage with consumers to begin seriously looking into investing in mobile payment technology.

McCaughey added that banks, mobile phone operators and money transfer companies are already spending heavily in this area.

“Any payment player that deals with customers should be very interested in this opportunity because the potential for mobile commerce is huge. Everybody cares about their mobile phone; they care more about it than their wallet," he added.

The trend towards using smartphones as a payment method is gathering momentum around the world.

In Japan, consumers can pay for rail tickets at the station using their mobile phone. In Africa, M-PESA (M for mobile, pesa is Swahili for money) is a mobile-phone based money transfer service that has proven popular around the continent, and the fundamental technology will soon be making its way into more developing markets.

“We’re going to see more and more transactions using mobile technology, particularly in the developing world, rather than the developed world,” said McCaughey. “In Europe, it’ll be a couple of years before it really takes off.”