The disappearance of physical money as we know it might be closer than we thought. Just a few months ago Denmark began to regulate the use of bank notes and coins with the goal of reducing their use among the general public, and now the recent Mobile World Congress celebrated in Barcelona reinforced the increasingly real alternative idea of payments by mobile phone. It’s no wonder that startups and entrepreneurs across Europe have begun to focus on this sector and to develop increasingly advanced and secure mobile payment apps; a billion euro market is at stake.
The mobile payment challenge: moving from the exception to everyday use
Payleven offers an example of the high expectations being offered by mobile payment: according to information on Techchrunch.com, Payleven has received 10 million euros in funding thanks to a number of investors including Holtzbrink Ventures, ru-Net, B Cinque, New Enterprise Associates (NEA) and MePay. That’s not too shabby considering this company began in 2012 under the wings of the Berlin accelerator Rocket Internet.
But Payleven isn’t the only European company moving in this direction. Precisely at Mobile World Congress the telecommunications company Vodafone presented their payment app for mobile phones and with it they join a long list of companies, especially in the financial sector, betting decisively for this payment method. But why now?
Although paying with mobile phones is nothing new and has been trying to become an acceptable alternative to traditional cash and card payments for some time, internet connections, mobile phone speeds and even the security of the transactions weren’t favorable enough for this method to spread. In addition, businesses were reluctant to adopt this payment method, preferring traditional credit cards. With the change brought on by digital transformation experts believe that by 2019 mobile phone payment will have gone through a true revolution and will be a real opportunity for ICT businesses to develop in Europe.
According to the site Business Insider, if in 2014 this payment method barely reached an estimated 10 million dollars in the US, in 2016 we can expect to see close to 200 million dollars and by the end of the decade this method could top 700 million dollars. In this context there are startups and apps that are strongly positioning themselves in the market like PayPal Here, Pay Anywhere and the previously mentioned Payleven, but the variety of these types of apps is about to grow just as much as its popularity as the preferred payment method.