The mobile payment sector continues to prove itself as a hotbed of opportunity for developers, with the Yankee Group predicting in a recent report a sixfold increase in mobile payment transactions globally by 2014, topping out at $984 billion. By way of comparison, the 2010 market was $162 billion.
Yankee Group defines mobile payments as any kind of purchase made with a mobile device—including mobile banking, international and domestic remittances, contactless cards, mobile coupons and near-field communications.
Obviously that includes payments made via nifty gadgets that attach to mobile devices as well, including Twitter co-founder Jack Dorsey’s mobile payment startup Square—which just announced that it will make mobile payments even more accessible for merchants by waiving the 15-cent-per-transaction fee it previously charged, and collect only the 2.75 percent flat fee on purchases. The website GigaOm commented on the development:
“By dropping the fee, Square is able to better position itself against Intuit’s GoPayment service and Verifone’s Payware Mobile. These developments reflect the growing competition in the mobile payment space as companies look to profit off the increased willingness of consumers and businesses to transact by mobile devices. It means combined with all the movement on NFC and carrier billing, 2011 is increasingly looking like the year mobile payments finally break out into the mainstream.”
Perhaps it’s already there, given not only the momentum and expectations for the market, but also the investment in even more startups. The newest is Paydiant, which just landed $7.6 million in a Series A round led by North Bridge Venture Partners and General Catalyst Partners. Paydiant is still in stealth mode and plans to launch in 2012, so it remains to be seen how the company’s solution will differ from the established players. And given all the investment, opportunity and rosy forecasts surrounding the mobile payments sector, the company—and anyone else looking to join the fray—had better have a unique slant on the market.