Despite a lot of talk about mobile payments over the past decade, we’re still way behind many other countries. Right now, in China, for example, there are entire cities where cash is virtually not used and plastic is being used less and less. A recent article from NPR reported that China did $5.5 trillion through mobile payments last year (about 50 times the amount in the U.S.). India is another country where mobile payments is skyrocketing. Research from Statista projects a compound annual growth rate (CAGR) of 138.7 percent in India’s mobile payments transaction value between 2017 and 2021, resulting in nearly $2.6 billion (U.S. Dollars).
One of the biggest factors that’s held the U.S. back to date is the maturity of our legacy payment infrastructure — along with all the myriad players that have a stake in the current system. Speaking at the recent Mobile Payments Conference, Dan Gonzalez, VP of payment industry relations at the Federal Reserve Bank of Chicago, said, “Unlike the other countries that have a small handful of payment companies, we have more than 10,000 financial institutions in the U.S.” For example, in China there’s basically two players – Alipay (owned by the Alibaba Group, an Amazon equivalent) and WeChat Pay (owned by China’s Facebook equivalent). Not only do we have more stakeholders, but we also have lots more governing bodies and bureaucracy, such as PCI DSS, Dodd-Frank, the Electronic Fund Transfer Act (EFTA), the Electronic Signature Act, the Federal Trade Commission (FTC) Act and the Uniform Electronic Transactions Act just to name a few.