Mobile Payments are Here to Stay

English: An NFC (Near Field Communication) poi...Steve Jobs once said, “We must deliver technology that gets out of the way.” Starbucks seems to have taken this advice to heart in implementing its mobile payments app, attracting over 10 million active users in the U.S alone. Mobile payments now account for over 10 percent of Starbuck’s revenues in the U.S, and are a testimony to the fact that the era of mobile payments has arrived.

Starbucks’s strategy of offering $5 credit to those joining the My Starbucks Rewards program paid off, and generated 500,000 downloads of the mobile payments app within two weeks of its launch in January 2011. The app is extremely user-friendly, and comes with incentives to users for paying through their smart devices.

The app is particularly useful for those who don’t like paying for their purchases using cash. They can simply open the app on their phones which has a barcode; the barcode is scanned by the sales representative and the customer’s Starbucks prepaid account is automatically debited. Customers paying via the app earn points and can easily redeem these points on their Starbucks cards. They can also reload the balance in the Starbucks cards through this app

In contrast to Starbucks’ experience, Google Wallet has been facing an uphill climb. The concept is in tune with the times: allowing users to store credit/debit card information on their mobile devices, and using these devices to make purchases. Despite Google’s massive global presence, Google Wallet has garnered only 10 million downloads in the Google Play Store. Although offered across a number of countries around the world with over 200,000 merchant locations in the United States alone, Google Wallet is still far from a household name.

Jonathan Grudin, principal researcher at Microsoft, contends that right now, there are few incentives for consumers, retailers, and communication companies to create the necessary infrastructure to completely do away with credit card and cash transfer payments.

Mobile payments not only need to provide a great user experience, but users must have the confidence that their trust is protected. At the same time, mobile payments need to add value. Users may not see their smartphones as wallets if they are satisfied with their current payment methods.

In fact, a sound financial system can act as a deterrent to the growth of mobile payments. There is a strong likelihood that mobile payments would be more successful in the developing countries where the financial systems are not as stable as those in the U.S or other developed economies. For that to happen, however, users in these countries have to perceive mobile payments as a more reliable form of payment relative to the existing methods.

Heavily invested in the current payment practices, the credit card industry could potentially come in the way of the widespread adoption of mobile payments, particularly if it sees them as hurting their bottom line. The credit card giants need to be 100 percent assured that they stand to gain from transition to mobile transactions before they will put their weight behind the paradigm shift to mobility.

Notwithstanding the bumps in the way, we at Market Analyst believe that the convergence of physical and digital commerce is simply inevitable. Already, Google Wallet and PayPal are trying to own the space. Still small in number, more and more shoppers are opting to go cashless. Businesses are coming up with ways to accept digital and mobile payments. In the U.S., a number of retailers are looking for ways to optimize mobile payments at check out. With a life style that is changing so rapidly, it is natural for consumers to expect an evolved shopping and payments experience.

A study by at North Carolina’s Elon University predicts a radical change in the way we pay by 2020. In fact, Elon’s Imagining Internet Center believes that mobile money represents more than just a more convenient way to pay. According to the center’s director, Jenna Anderson, mobile payments represent “an opportunity to implement security measures that are lacking in our current financial systems, to offer consumers more control over their spending and to even reinvent the way we think about the concept of ‘money’.”

The number of mobile payment users is approaching 300 million, and in terms of value, mobile payments have surpassed $100 billion. Mobile payments are primarily being used in ticketing, with examples such as that of Starbucks being an exception. However, in the next couple of years, mobile payments will hit the mass market, their use becoming more dominant in the retail market.

To succeed in the mobile payments market, retailers need to be up to the task, making their solutions compelling enough to attract users. Nevertheless, replicating Starbucks’ success story would be challenging. After all, Starbucks has a massive loyal customer base, and its affluent customers are surely more tech-savvy than those of most retailers.

While the odds of predicting how long it will take to revolutionize the entire payment system are probably high, one thing is certain: In the near future, worrying about losing your wallet would be a thing of the distant past.

Blogger: Samar Kaunain

© 2013 Market Analyst, LLC. All rights reserved.

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Artificial Intelligence – Making Machines Smarter!

Simple reflex agent, based on Artificial Intel...

Simple reflex agent, based on Artificial Intelligence: A Modern Approach (Photo credit: Wikipedia)

Mankind has long been fascinated by the idea of intelligent machines. The first manifestations of thinking machines and artificial beings can be seen in Greek mythology in the form of Talos of Crete, the bronze robot of Hephaestus, and Pygmalion‘s Galatea. By the 19th and 20th centuries, artificial beings had become a common feature in fiction. Science fiction further contributed to nurturing the concept of sentient machines, but the fact remains that fiction bears little resemblance to the real world.

The study and development of intelligent machines goes by the name of artificial intelligence. As a scientific discipline, this field was born out of deliberations at a conference on the campus of Dartmouth College in the summer of 1956. The basis of artificial intelligence is using computers to simulate the primary activities that create our intelligence. The real challenge has been to understand how natural intelligence works.

Artificial intelligence has been getting exponentially smarter for decades. It is true that machines cannot yet be programmed to form intuitions about the physical world without complex and extensive calculations. Scientists delving into artificial intelligence hypothesize on how and why we learn and think, and then they experiment with these hypothesizes.

Nevertheless, most people do not realize the extent to which artificial intelligence has been practically implemented, and the rapid advances technology is making. Over the past several years, artificial intelligence has been used to improve existing applications in a number of areas such as medicine and biotechnology, transportation guidance systems, and manufacturing automation.

Artificial intelligence is closely linked with robotics, the science that deals with man-made machines equipped with the intellectual abilities of humans. The goal is not only to give these machines the ability to communicate verbally and to perform various tasks, but to instill in them the ability to reason and to formulate ideas.

Artificial intelligence is being used to enhance the capabilities of smartphones, tablets, and other computing devices by giving them the ability to perform a host of functions on their own. One of the applications of artificial intelligence is intelligent search on the Internet. Google’s Knowledge Graph is the latest refinement to its search engine product that provides users with in-depth responses to search queries by connecting these queries to information-rich topics on people, places, or things.

Japanese electronics company, Sharp Corp., has started releasing products with artificial intelligence that activate on voice command or verbally offer common courtesies when they are used. One of the first such products is its vacuum cleaner, “Cocorobo” that has witnessed strong sales. Others include an air conditioner and a refrigerator that say “thank you” and give instructions on when to carry out maintenance. Upcoming products include intelligent microwave ovens and air cleaners.

Newer cars use artificial intelligence to take tire temperature and other measurements to make driving safer. Emerging developments allow cars to navigate on their own. Self-driving cars are now legal in at least three American states, including California, as well as in the U.K. These types of cars are Google’s pet project, but now other companies, such as Mercedes Benz, are jumping on the bandwagon, and the technology is evolving fast.

The medical field is one of the areas that are in the forefront of embracing artificial intelligence. Medical devices are being introduced that allow a computer to analyze data and make judgments on its own. Artificial intelligence has also been used in deep space exploration and high-complexity data mining and analysis.

Industry observers estimate that the artificial intelligence solutions market is approaching one billion dollars, and is poised to grow exponentially over the next few years. The United States currently represents the largest market for artificial intelligence, but the Asia-Pacific region offers the highest growth potential over the next few years.

Artificial intelligence gives humans tools not only to enhance the performance of machines, but to allow these machines accomplish tasks more efficiently, and without human intervention. However, as more and more intelligence is built into the machines, they will keep becoming smarter and more versatile. Some technologists contend that in not too distant a future, machine intelligence will overtake human intelligence.

Combined with the pervasiveness of mobile devices, artificial intelligence has the potential of impacting virtually facet of our lives. No wonder, IT and software vendors are pouring billions of dollars into commercial solutions based on artificial intelligence. However, unlike a human mind, a computer will never be capable of complex reasoning or able to process a complicated emotion.

Blogger: Unum Shafiq

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Market analysis reports on Artificial Intelligence

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