​Jeff Kagan: Mobile Pay Changes Everything in 2016

Jeff Kagan |

Wireless is the center of the universe for innovation and transformation. It changes the way we do everything, industry after industry. The fields of mobile pay, banking and credit cards are suddenly experiencing an explosion of new ideas with new services. It started with services like PayPal (PYPL) and is now expanding to Apple (AAPL) Pay, Google (GOOG) Wallet, Android Pay, Samsung Pay, Target (TGT) Pay, Wal-Mart (WMT) Pay, CurrentC and more. There are also plenty of banks with their own mobile credit card business. So who will win?

All these companies want to reinvent the credit card space and long-term the entire banking business with eWallet and ePay tech. We are just in the first inning of this new game. This is a huge opportunity for businesses and banks. Winners and losers will be based on hot new ideas and innovation over the next few years.

As an industry analyst, I look for what’s going to be hot, and I think this entire mobile pay space is about to erupt. Exactly when, and who the leaders will be going forward is the only question right now. This space is reinventing and expanding itself.

Think about this transformation the same way the smartphone sector changed several years ago: Blackberry (BBRY) and Nokia (NOK) led until Apple iPhone and Google Android entered the space.

That’s why, recently, the competitors in this space seem to be rushing to get on my radar. As an industry analyst, consultant and columnist, my opinions are heard industry-wide. That seems to be what these companies are looking for right now. They all want to punch their way onto the map.

Mobile Pay Will Reinvent Credit Card Space

The entire banking and credit card space will be reinvented if these companies have anything to say about it. There will be many new ideas entering the marketplace. Like in any innovative space, some will succeed, some will fail, but the industry will continue to transform quickly, over and over again.

This challenge is what drives companies and entrepreneurs. So companies, even long-term industry winners must become entrepreneurial. Either that or they will lose in this rapidly transforming space.

Expect to see countless new ideas enter the marketplace. The next question is which companies will be winners and losers going forward. The truth is, there will be several winners and losers in 2016. However it’s important to understand that this is such a young space and leadership may shift several times over several years.

Think of this like the way Motorola (MSI) lead the marketplace for decades until in the late 1990’s they lost that leadership position to Nokia and Blackberry. Then these two lost the leadership position to Apple iPhone and Google Android a few years ago.

The marketplace keeps changing and banking and credit cards are now part of this fast changing world. Winners today may be different next year. This is a fluid and young marketplace.

Investors Looking for Mobile Pay Winners

Discovering the winners early on is what investors are looking for. However even the winners may not be winners long-term. We must look at this space as a rapidly changing environment. So we must continue to stay plugged in and ready to shift quickly going forward.

Today this new space is welcoming new players on a regular basis. A year or two ago there may have just been one or two players in a test mode. Now there are many more big, brand name companies jumping in.

The customer on the other hand is not jumping in as quickly. This segment is growing, but not exploding. However over the next year or two all these big name players will start to market and advertise their mobile payment services. In addition users will talk between themselves and learn that the marketplace is indeed ready for this new revolution. The pace will pick up.

The third leg in this stool is to get the retailers to update the gear they have at their cash registers to let their customers use mobile pay soltions. Some will install one type of solution. Others will install several types which will open their horizons more. Some will do business with a financial services company which manages a variety.

The truth is, very few retailers have made the leap so far. A quick visit to your nearby grocery store, Wal-Mart or Target will illustrate that point. However the pace will quicken.

In 2016: PayPal vs. Apple Pay vs. Android Pay

So 2016 will see this space continue to grow. Just consider the companies entering this space. Existing leaders in this space like PayPal will increasingly compete with new services like Apple Pay, Google Wallet, Android Pay, Samsung Pay, Target Pay, Walmart Pay, CurrentC and more.

Banks will increasingly move into this space and I would not be surprised to see things like Wells Fargo (WFC) Pay and Bank of America (BAC) Pay. In fact I would not be surprised to see this expand further to communications companies like AT&T (T), Verizon (VZ), Sprint (S), T-Mobile (TMUS), CenturyLink (CTL), Comcast (CMCSA), Time Warner Cable (TWC), Charter (CHTR), Cox and more.

Yes, I believe mobile pay will transform and rapidly expand this money space going forward. The next five to ten years will be a rapid change in many areas. In fact, as with other rapidly growing industries, I expect the technology to continue to change and continue to transform the industry over and over again.

That means leadership could change over and over again. Just like it did in every other industry over the last few decades. I firmly believe we will transform this entire space over the next few years.

However, we still have to continue to build all three legs of this stool before mobile pay becomes a mainstream offering. When we do cross over the line however, I believe mobile banking and mobile pay will be a rapidly growing segment that every investor will want a part of. The only question is when. Stay tuned...

Equities.com columnist Jeff Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst and consultant. He shares thoughts on the changing industry, which he's been following for 25 years. He follows what's hot, what's not, why and what's coming next. Email him at jeff@jeffKAGAN.com.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
AAPL Apple Inc. 115.59 -2.66 -2.25 66,136,244
BAC Bank of America Corporation 16.87 0.15 0.90 58,731,319
BBRY BlackBerry Limited 7.26 -0.01 -0.14 3,072,369
CHTR Charter Communications Inc. 248.64 -8.42 -3.28 2,999,430
CMCSA Comcast Corporation Class A Common Stock 62.56 -1.96 -3.04 21,418,787
CTL CenturyLink Inc. 28.25 -0.20 -0.70 3,289,316
GOOG Alphabet Inc. 799.07 -8.60 -1.06 1,648,658
NOK Nokia Corporation Sponsored American Depositary Sh 5.16 0.19 3.82 16,736,614
PYPL PayPal Holdings Inc. 42.33 -0.98 -2.26 10,918,791
TGT Target Corporation 68.59 0.64 0.94 2,846,524
TMUS T-Mobile US Inc. 49.50 -0.10 -0.20 11,194,034
TWC Time Warner Cable Inc n/a n/a n/a 0
VZ Verizon Communications Inc. 47.63 -0.21 -0.44 15,049,230
WFC Wells Fargo & Company 46.15 0.43 0.94 25,181,900
WMT Wal-Mart Stores Inc. 69.59 0.23 0.33 5,050,540


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