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Horace Dediu, an analyst of Apple’s business, estimates that Apple Pay could be a billion dollar business by 2020. Mobile payments also represents a strategic opportunity. According to figures from the venture capital firm Kleiner Perkins Caufield Byers, mobile accounted for 51% of the time American consumers spent with digital media in 2015, a figure which has increased from 21% since 2012. Solve the mobile payment experience and you create “stickiness” for a provider’s mobile platform.
The impact of mobile devices on society has been dramatic: over 2.5 billion people own smart phones around the world; the iPhone led Apple to become the most profitable and valuable company in the world; people report anxiety when separated from their phones.
Payments is also a hot technology: earlier this year Ant Financial, the company behind Alipay, completed the largest funding round by a private technology company ever, raising 4.5billion dollars for an overall valuation of 60 billion.
Combining these two trends, Mobile Payments, should be a hype-fest. In this paper we look at the hype and the fundamentals of Mobile Payments and try to offer some guidance to help airlines build or consolidate a mobile payments strategy that stands the test of time.
"The opportunity lies in the fact that mobile spend still lags behind mobile attention. According to comScore, mobile accounts for 60% of the time US consumers spent with retail sites but only 16% of the money spent. Tech giants are betting on mobile wallets to close this gap."