Join over 120+ tech professionals by guest blogging for CitizenTEKK. We encourage submissions. If you’re a startup, developer, programmer, investor, mentor, or other thought leader in the startup and developer community, please don’t hesitate to apply!




Build forms to make smarter, faster decisions with WizeHive

Category: mobile payments

There are 8 posts published under mobile payments.

Mobile Pay: The Digitization of Money

For years the smartphone has made life simpler. It has given us the power to make phone calls, send text messages, send and receive emails, surf social networks, and more – all in the palm of our hands. For many people, the smartphone is something that they simply “can’t live without.” And if you’re one of those people, the latest developments in the mobile world are only going to make it that much harder to drop your device. Specifically, you may find that by this time next year your wallet will have also been replaced by your smartphone.

According to mobile technology firm NN4M, mobile payments are primed to be the next major defining moment in the world of payments, signaling a boom in the number of virtual transactions and a significant shift in how consumers pay for goods. While person-to-person payment options such as Venmo and SquareCash have grown in popularity over the last few years, 2015 is expected to be the year when widespread adoption of mobile payment practices finally takes hold.

The Three Major Players

One of the biggest indications that mobile payment is here to stay - and grow – is the adoption of these technologies by the biggest players in the mobile world – Apple, Samsung and Google.


In 2014, Apple announced the release of Apple Pay, a mobile payment and digital wallet service that lets users make payments using the latest Apple devices, including iPhone 6, iPhone 6 Plus, iPad Air 2, and more. Apple Pay allows users to make in-app purchases with one click, and also allows users to make real-world purchases by hovering their device over specified readers. While the announcement didn’t come as a complete surprise, Apple’s adoption of the technology accelerated interest in mobile payments and is just one of the reasons why mobile payment is expected to be a touted topic in 2015. One challenge with Apple’s approach to mobile payments, however, is that it is largely dependent on adoption by retailers, as a specialized card reader is needed. While Apple Pay is already accepted at thousands of retailers worldwide, it will take continued consumer demand for the service for all retailers to adopt it.


Another indication that mobile payments will be on the rise in 2015, is Samsung’s recent acquisition of LoopPay, a mobile-payments technology start-up. Samsung announced the merger early last week, and buzz around how the tool will work has garnered much attention. LoopPay seeks to replace your wallet entirely by storing your credit cards, debit cards, rewards card, and even your ID. And, unlike Apple’s method which requires retailer adoption, LoopPay works with nearly all existed credit card readers. Though the tool does require users to open an app to make the payment, once the app is open users can hover their device, click a button and get on with their day.  Without the need for specific technology to be adopted by retailers, LoopPay has already made its way into 10 million locations, and has been voted as one of the top mobile payment options in America.

Samsung’s acquisition of LoopPay is not only an indication of their desire to compete in the mobile payment world, but to their commitment to make a smart life for everyone. This acquisition is the latest in their line of moves that encourage synced devices, intuitive usability and a seamless blend between technology and human interaction.


Google Wallet, which was originally released in 2011, is another mobile payment option that is expected to spur the growth of mobile payment popularity. Though the application has garnered criticism for perceived security concerns, the app received a push in 2014 with the announcement of its Gmail sync feature – which allowed users to send money to other via email. Those individuals who receive money via Google Wallet payment, can use the money instantly for in-app purchases, or can “cash-out” and have the amount sent to their bank account.

The End of The Traditional Wallet?

While wallet manufacturers don’t have to worry just yet about declining sales, the latest developments in mobile payment options are certainly exciting, and showcase the deep interest that both consumers and tech companies have in this avenue. And though security and privacy concerns may slow complete adoption of mobile payments, 2015 is certainly poised to be the year where it all begins. The only question now, is which mobile payment will you use?


Traditional Industries Are Being Upended by Apps

It isn’t news to anyone that we live in a mobile world now. Over half of adult Americans own smartphones, and the desktop business has been steadily declining as tablets and phones continue their ascent. As consumers, we have spoken: Our world is on the go, and we want technology that can keep up with us.

But it’s more than just the size and convenience of these products that make them so revolutionary; they mark a shift in how we interact with our devices and through them, with products and services in the outside world. The app economy doesn’t exist to simply occupy people’s time with games and to-do lists — it’s a way to disrupt traditional ways of doing business.


3 Traditional Industries that Apps Have Disrupted


Whole volumes can be written on the various businesses and services that have benefited, and suffered from, the smartphone revolution, but here are three key examples of how apps have managed to revolutionize whole industries.


1. Travel: While the traditional travel agent’s way of doing things was on the decline before smartphones, thanks to websites like Expedia and Travelocity, we still printed our boarding passes, booked hotels and flights way in advance, and manually kept track of our travel itineraries.

With mobile phones, this changed almost completely. Most airline apps allow us to check in and present our tickets from within the app and, more importantly, they continuously update us with current flight ETAs and gate change information that can make the difference between a successful trip and a disastrous one.

Furthermore, a whole industry of mobile apps has arisen around the concept of last-minute deals when it comes to hotel reservations and other travel accommodations. With their phones, users have the ability to make last-minute vacation plans that are often cheaper than ones made months in advance. This practice has become much more widespread in the days of mobile.


2. Transportation: You’ve most likely heard of new car services like Uber and Lyft. These companies have made names for themselves by creating an experience that allows you to order and pay for a car service with a few simple taps on your phone. The key thing to remember about these services is that mobile is not their business — it’s the tool through which people access their service. Mobile is the facilitator, not the endgame.


3. GPS: Remember when everyone had a TomTom or Garmin hooked to their dashboards? When was the last time you had one hooked to yours? Built-in apps, such as Google and Apple Maps, have all but replaced this once-burgeoning product category, offering the same features without the need for another clunky device.

Furthermore, smartphones have surpassed traditional GPS devices, with apps like Waze, which provides crowd sourced alerts about traffic, accidents, police information, and even red-light cameras. By providing points and rewards for adding information, Waze turned maps into a game and created something wholly new in the GPS industry. Its no wonder Google spent $1 billion to acquire it.


What to Keep in Mind When Designing Your App

These aren’t the only industries that have been disrupted by mobile, and they won’t be the last. With the widespread adoption of wearable tech just around the corner, we’re going to be presented with new and exciting ways to change how we do business. There are a few key things to keep in mind when looking to change the world with mobile.


  • Count the steps. How many steps does it take to provide your service? If you can find ways to cut down on the number of steps or make them easier with mobile, then you have a good start when developing an app.
  • Put the user experience first. Making your app a pleasure to use can make the difference between success and failure. Learn about the psychology and motivations behind people’s interactions, and design your app around that.
  • Capture feedback. Make it easy for users to provide feedback — and for you to track it. Seeing how people actually use your app and knowing what they’re looking for can give you a better picture of the place mobile has in your business.
  • Partner up. You don’t need to do everything. Look for ways to connect what you have to offer with other products and services so your users get a full experience. That means you won’t get bogged down in details irrelevant to your core business.


A key thing to keep in mind when looking toward the next wave of disruptive apps is how mobile fits into the way people live. Does your app empower people to do things they already want to do? Is it strategically positioned to be useful at certain crucial times (like when they need to find a hotel room at the last minute?)


The major reason apps have been so game changing is that they have improved upon the ways people go about already doing things by not forcing people to change their lives. As long as app makers continue to keep that in mind, we are only at the beginning of the app revolution.


Mobile Transaction Growth Outpacing the Payment Establishment’s Ability to Self-govern

Payment companies and mobile technologists alike agree — at least in public, to hide the fierce competition going on behind the scenes.


In order to grow mobile commerce and best serve the retailer and consumer, there needs to be better inter-industry cooperation in developing standards and in promoting interoperability between mobile payments platforms. In the meantime, still hurting from the economic downturn of the past few years and seeking to better engage with consumers, retailers are viewing new mCommerce technology solutions as a way to both build its customer base and increase consumer loyalty — to capture new sales while generating more incremental sales.


Mobile Phone Shopping Cart Before Trade Horse


In August 2012, Google, PayPal, Verifone, the US Carriers, Capital One and the major US banks formed the Mobile Payments Committee within the Electronic Transaction Association (ETA), with a stated objective of “Enhanc[ing] business relationships and network interoperability among merchants, card brands, networks, equipment manufacturers, and financial institutions.” Today, the committee has ballooned to 107 members (the next largest ETA committee – Government Relations – has just 41 members) and does not include the payment innovator Square. Within a year, the committee published Best Practices and Guidelines for Mobile Payment Solutions (September 2013), and is expected to continue to advise the merchant-acquiring payments industry as mobile commerce becomes more widespread. But can the trade organization-delivered advice keep up with the fast past of mobile technology advancement and the implications that it has for merchant adoption and consumer behavior?


New technology offerings focused on mobile payment ubiquity continue to pop up, launch and take off at spectacular speed – driven by merchant need and consumer acceptance. After raising just over $123,000 from nearly 1500 backers on Kickstarter, mobile payment enabler Loop raised $10 million in funding (November 2013) and is already offering a $39 fob to consumers that allows you to store all of your credit and gift card data on one device, and to pay wirelessly at the store once the small 2.5 inch fob is attached to your phone. Due out in April 2014 is a more elegant and functional, but also more expensive Loop solution at $99 per unit — a phone charging case that acts in the same way as the fob, but which sits flush to the phone. And of course Square just continues to explode — launched in Q1 2010, the company processed approximately $20 billion in transactions in 2013, and expects to reach $30 billion this year across more than across more than 200,000 merchant locations (including 7,000 Starbucks cafes), and an undisclosed number of Whole Foods nationwide. Significantly, Sarah Friar, Square’s CFO and Operations Lead stated at this month’s Women 2.0 conference in San Francisco that contrary to popular payment industry belief, the service’s transaction size range is quite large – with $1,000+ purchases coming from a diverse set of payees such as landscaping companies, pest control firms and artists.


Restart, After Restarts on the Standards Front


Whilst mCommerce on the retail level continues to grow exponentially, the payments establishment is still tending to practical issues such as the development of uniform security standards. In the UK alone, IMRG and CapGemini’s e-retail index showed that a “tipping point” was reached in terms of m-commerce in 2013, with mobile transactions increasing 135% over 2012 and now accounting for all e-commerce growth on a year with an overall 18% growth in online transactions. In December 2013 alone, 27% of online sales came from mobile devices, equating to approximately $4.96 billion USD. In the larger U.S. market, similar rapid mobile transaction growth is cited, with the most recent Internet Retailer study stating that the top 500 mobile retailers reached $34.2 billion in mobile sales in 2013, up 64% from $20.9 billion in 2012.


At the most glitzy, if not the most well-attended payments conference Money2020 last fall, there was much talk surrounding the development of standards governing key issues such as the storage and transmission of PII (personally identifiable information). Credit card payment verification and ID validation company Jumio (ex-Facebook Edward Saverin is a board member, lending his name and investment dollars) announced an effort to jump-start a member-owned and operated association focused on PII. What is interesting about this development is that the relatively young company Jumio felt the need to take it upon itself to nudge the industry about an important security and privacy issue. When questioned about this, Jumio CEO Daniel Mattes stated that it was there intention to start the initiative in the hopes that the greater establishment would take the subject on and carry it forward.


And the nudge should be well taken. mCommerce security is becoming a more pressing issue, with hacker-criminals migrating to the mobile transaction arena as security and best practices in the online arena become more robust, better understood and widely practiced. At Money2020, Jim McCarthy, Visa’s Global Head of Innovation and Strategic Partnerships expressed a new willingness for Visa to work with other vested players in the payment space, and showcased a new alliance between the company, MasterCard and American Express to propose to the industry the creation of a global token-based standard for making online and mobile transactions safer and easier for the consumer. There’s been no update on the alliance since the press release and announcement last October, but it’s safe to say that the growth of mobile transactions is outpacing the ability of traditional financial institutions to safeguard and govern the m-commerce space.


YEC Answers: 9 Tips for Developing a New Mobile App

Considering how saturated the app market is, what advice would you give to an entrepreneur developing a new mobile app? -CitizenTEKK

The following answers are provided by the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

1. Identify Factors

This one is simple because I am working on my own mobile app now and have been doing a crazy amount of research in this area. Basically, find the sticky factor and the viral factor. What this means is what makes the end user want to come back and add content on a daily (if not more) basis? Then, after they add their content, what makes them want to share that with their network?

Andrew Vest ( ), Preferling ( )

Entrepreneur at YEC comments at CitizenTEKK

2. Gather Usage Metrics

Due to the overwhelming amount of mobile apps in the market, it is very important that you analyze your app through metrics. Services such as Mixpanel can be integrated into your app to gather important usage data, which can guide you to the compelling portions of your app. Once you identify how and what your users find value in, you can focus on those and remove underutilized features.

Phil Chen ( ), Givit ( )

Entrepreneur guest blogs at CitizenTEKK

3. Deliver Value

In the oversaturated startup and app market, delivering value that users can see, understand and that truly delights is job one. Your app doesn’t have to change your users’ world — but if it makes their live easier or more rich, you may be onto something.

Brendan Mangus ( ), Colorwheel Media Consulting ( )

Brendan Mangus, YEC

4. Think International

App developers have set their benchmarks on the U.S. market, forgetting how quickly Asia, South America and Europe are booming in the mobile space. Create apps that can go global and provide value in more than just one language.

Grant Gordon ( ), Solomon Consulting Group ( )

Grant Gordon of Solomonbi

5. Launch in Test Markets

Launch your app in test markets first. So much of gaining traction in the app store comes down to either being featured or being a top 25 app. The best way to game the system is to test your app out in small regional markets before you launch in the U.S. Work out the bugs and figure out what drives downloads. Don’t launch too early in the U.S.

Adam Lieb ( ), Duxter ( )

Commentator at CitizenTEKK



6. Solve Real-World Problems and Stay Committed Through the Iterations

The app market is indeed saturated. However, most of the apps are poorly built. This is the result of hopefuls building apps just to build one, and this mindset is generally wrong for an entrepreneur. Focus on solving real-world problems you are passionate about. Remember that startups and app development go through iterations. You will not always get it right the first time. Stay committed.

Gideon Kimbrell ( ), CLUBSCORE, INC ( )


7. Solve One Problem Extremely Well

Too many app builders try to solve too many problems at the same time. It’s not about how many features your app has; it’s about how well you’ve been able to perfect the one your app was built for in the first place. Build a clean, beautiful app that executes its main job extremely well. Once you deliver a great user experience, you are already ahead of 90 percent of the competition.

Juha Liikala ( ), Stripped Bare Media ( )

CitizenTEKK hosts discussion from YEC


8. Ensure a Strong PR Launch

When you launch a new app, make sure you make a splash in the media. That requires a significant amount of legwork prior to launching your app. You don’t want to have to pitch a story to media outlets about a product that has been out for months already. Hit the ground running by preparing customized media pitches for specific journalists well in advance of the launch.

Chuck Cohn ( ), Varsity Tutors ( )

Chuck Cohn from YEC


9. Research Trends

App developers should invest a lot of attention in trending technologies, particularly geo-targeted push notifications, cloud/Dropbox integration, social media sharing options, easy transactional features and light battery usage. Although some trends turn out to be just fads, these user-friendly developments are already showing strong staying power.

Phil Laboon (!/eyeflow ), Clear Sky SEO ( )

YEC entrepreneurs


Envisioning an Integrated Device World

When I think about all the ways my smartphone helps me to meet up with friends—through voice, text, email, and a variety of friend-connectivity apps—I often find myself reflecting that mobile devices have been a terrific boon for my social life.

When I actually meet up with the friends that my phone has helped me find, however, I sometimes come to the opposite conclusion. I can’t count how many times I’ve ended up sitting at a bar booth, idly crunching beer nuts as I wait for my buddies to stop playing with their phones (and yes, often I’m the one playing with my phone while they crunch beer nuts). Far too frequently, the very thing that brought us together prevents us from having a meaningful interaction.

I know I’m not the only one bothered by device rudeness.  I’m sure you’ve had similar experiences with your friends, assuming you weren’t too distracted by your own device to notice that everyone else was immersed in theirs. This state of things has driven some to extreme measures, like requiring everyone to leave their phones at the door before entering a party. Others have just given up and resigned themselves to a life of interrupted conversations.

I am not among the people who despair about a future in which our devices constantly butt into our social interactions, however. That’s because I see device distraction as merely one phase—albeit  an annoying one—in the evolution of our technology. To me, that evolution seems to be pointing toward a world of technological integration, with tech assimilating to our physical environment and social fabric rather than rupturing it.

Many of the advances toward integrated devices are being made in the form of technologies that interact with human voice and touch. Technologies that project touch screens onto the physical environment so that we don’t have to carry our own personal devices everywhere we go are already in development, and applications of voice recognition technology are emerging that would embed that technology into everyday objects, even entire environments. Personal assistants tuned to your voice have already made their way into the consoles of cars, and they could be in the home before long, as well. Instead of fiddling with appliances, air-conditioning systems, and light switches, we will be able to direct the environment around us via voice command.

These new integrated device technologies would not be merely reactive—they’d  take the initiative, as well—predicting your preferences based on prior interactions, accessing your calendar, and email to remind you of meetings, etc. They would be much more like another person in the room and much less like a separate world for you to disappear into.

The implications for our social interactions are vast. Instead of serving as a break from the conversation, our technologies will become part of the conversation—available for everyone to see and interact with at once. We won’t have to worry about being pulled out of conversations by our devices, because they will seem like a natural part of the fabric of those conversations.




Can Healthcare Catch up in a World of Digital Payments?

Healthcare reform has delivered new potential benefits for patients. However, it has also forced hospitals to tighten their operations or face big losses.

Fortunately, other industries show us that the application of proven online and mobile payment strategies can reduce these pressures while benefitting patients.


Historically, hospitals offset regulatory revenue pressures through a reliance on public payers and private health insurers for revenue. But as public money becomes less predictable and private insurers shift the cost burden to individual patients, hospitals must re-examine their payment and collections philosophies.

Overall, five major trends are converging to put stress on the traditional revenue mix for hospitals and their financial outlook.


1. Growing patient out-of-pocket responsibilities. As part of the consumer driven healthcare trend, health insurers are shifting a greater portion of costs to patients through high deductible health plans and higher co-pays. For hospitals with legacy payment platforms, this has led to extended payment times, increased overhead for larger patient collection efforts, and a greater risk for bad debt from non-paying patients.


2. Medicare payments based on quality of care. Medicare reimbursements are a key source of revenue for hospitals. New health reform legislation links these Medicare reimbursements to patient care and satisfaction through Value Based Purchasing (VBP). This means that higher patient satisfaction scores result in a higher percentage of Medicare reimbursements. Similarly, low scores could result in financial penalties. Medicare payment rates will also be tied to hospital readmissions so that reimbursements can be cut if a discharged patient must return to the hospital because of a complication.


3. Uncertain Medicaid funding. Last year, the Supreme Court ruled that states would not be required to expand their Medicaid programs as originally mandated by the health reform act. Medicaid covers people with limited income, and the bill was aimed at expanding coverage for more uninsured single adults. This ruling means that hospitals that were expecting their patients to pay more for coverage may now face higher than expected costs to treat the uninsured.


4. Lower rates from commercial health plans. In anticipation of the federal health insurance exchanges that become effective January 2014, large health plans have begun to pressure hospitals and health systems to agree to lower rates. In some cases, insurers have asked hospitals to cut current rates by more than half. While this strategy will help keep premiums attractive for new customers shopping for plans, it could further strain hospital revenues.


5. Experimental payment models. In addition to these already significant revenue burdens, the federal government and many private health insurers are rolling out new payment models that introduce more uncertainty into hospital revenue streams. Bundled payments and Accountable Care Organizations are the hot, new thing in healthcare reimbursement. However, they force hospitals to work harder to capture savings because they require better coordination between the doctors and hospitals that treat the same patient. While the concept is promising from a patient perspective, none of these models has been around long enough to demonstrate savings.


While some of these new changes hold the promise of positive change for patients, they all create significant financial and administrative hurdles for hospitals. And even as patients win small gains, insurers will continue to push high deductible plans, which will force individuals to more closely manage their medical care and their medical bills. In response, some forward thinking hospitals and medical providers are exploring the application of online and mobile bill pay technology as a way to resolve their financial pressures and give patients greater control over their healthcare financials.


For those hospitals, online and mobile bill pay trends in other industries can act as a model for how to best apply these technologies in healthcare. Utility providers, retailers, and others show us that the convenience of online and mobile bill pay can help shrink payment cycles for hospitals, reduce bad debt, and increase patient loyalty – effectively mitigating many of the economic pressures they are navigating now. Innovative hospitals have an opportunity to engage their patients through self-serve payment plans, prompt payment discounts, and hospital loyalty programs. This is a powerful vision for the future of the healthcare industry where both hospitals and patients win.


Mobile Payments Are Not the Way of the (near) Future

There’s a lot of hype these days about “mobile payments” and the mobile wallet.

We are told that soon we won’t need a wallet or even a credit card. It’s simply not true[1]. Though our wallets are smaller, we all have credit cards. In fact, we have more cards than ever before, according to the latest Nielson Report.  And merchants continue to pay high monthly fees for payment processing terminals. So why aren’t we paying for everything with our phone? Why aren’t all merchants avoiding credit card fees by integrating to a new network?

I believe part of the answer lies in the notion that payments and mobile are two very different markets, neither of which is ready to be “merged.” While payments is certainly a hot topic these days, it shouldn’t be put side by side with mobile.  Mobile is naturally a growing industry since more of us have mobile phones, more of us spend time on them, and more content is developed each day for the mobile device than was ever developed for the entire PC market. Payments, on the other hand, has become a huge focus for entrepreneurs and investors focused on markets ripe for “disruption ,” simply because it’s universal – we all make, touch, receive payments every day.

Despite this, the industry itself has experienced little change since MasterCard, VISA, and American Express. These three big players haven’t changed much since their inception. And the credit card business is enormous.  It is one of the few industries where an entrepreneur can truthfully walk into an investor pitch with a slide showing “Trillions.” The blunt reality is that “mobile” is a consumer game and “payments” a merchant one.  It is difficult to tackle both sides – to simultaneously get merchants to adopt a new way of taking payment, and consumers to adopt a new way of making them.

Let’s first take a look at companies that I believe are “succeeding” in the payment industry. Most, you will find, have focused on leveraging the existing ecosystem of players like banks, acquirers, and card brands to work in their favor rather than against them – and none of these companies really involve mobile. Square, for instance, took the approach of solving the merchant pain-point of accepting cards and was underwritten to do so. To you or me there is really no difference (we probably wouldn’t know about Square if they hadn’t raised so much money). Collectively we continue to spend trillions of dollars at restaurants, retailers, gas stations, and grocery stores each year.

Square is now capturing billions of dollars within that existing spend. It’s not as if we – the consumers – are asked to spend differently, or spend more. Square makes it incredibly easy for merchants to accept cards, and in that respect they are eliminating – or at least reducing – an inefficiency in the acquiring side of the world. But, in no way, are they moving towards mobile payments, at least beyond trying a few initiatives with their larger merchants.

Starbucks, for instance, uses mobile to “detect” the consumers’ presence within the store when they are making a payment. I’m sorry to say that Starbucks is only one merchant of the approximately 20 million small/medium sized merchants in the US that uses mobile. Square is an acquirer killer. And why shouldn’t they be? As proven by their incredible growth, they don’t need to be in mobile payments to achieve success.

Now let’s look at the other side – a company we all know well and who is going after the mobile payment space: Google.  Google has poured a lot of money into their “Google Wallet” initiative – but hasn’t yet achieved the adoption they had hoped for. While we don’t hear a lot about Google Wallet, a recent blog post gives a good – and honest – indication: “Consumers aren’t interested.” I think there is a greater problem. You can’t use Google Wallet anywhere.  So of course “consumers aren’t interested.” Why would any of us use our phone to make a payment when there’s no place to make that payment?

Compared to Square, it would be as if Square had to get consumers to download and sign up for their app before making a payment at a merchant that accepts the Square dongle. Thankfully we don’t have to download an app – we simply use our card as we always have and continue to do a billion times a day in the US. By trying to solve for “mobile” and “payments” at the same time, Google attempts to change one of the most common every-day habits of consumers. And this change would only come after getting 20 million merchants to adopt a new technology when merchants are adverse to change and technology in the first place.

So can anyone solve “mobile” and “payments” simultaneously? In my opinion, the two are not set to come together in the near future. To be sure, it will inevitably happen one day, and yes mobile will play a big role. There are some companies I admire – such as Braintree – that are on the right path. That’s because they are focused on what I believe is the main value of ‘payments:’ trust.

At the end of the day, payments and money are simply an exchange of value – in this case the most basic form of value is trust. Trust has always been the most secure form of currency as well, regardless of what it was traded in (grain, gold, paper, plastic, bitcoin). As long as the two parties involved – particularly the receiving party – trust in the transaction that is taking place, then it is irrelevant what form the payment is made in or – more importantly – when it is actually paid.

If merchants trust you, they will take your money. If all merchants could trust the consumers making payments via phone, and if no one needed to make changes like adding hardware, Google Wallet could be a hit. Suddenly, we could “use it anywhere and for everything.” But this is not the case, and I believe it is a very difficult challenge to solve.  Until it is solved, both payments and mobile will be large industries, but I doubt we will see any transformations in “mobile payments” any time soon.


[1] If math is any indication: Forester estimates “mobile payments” to reach $90 Billion by 2017, at which time total US “payments” will be in excess of $10 Trillion. More money will be spent at Wal-Mart than will be the entire mobile payments industry.


Stop Ignoring Your Audience in the Emerging Markets

Our headquarters are located in Estonia, which is a country with 1.3 million people. This country is roughly the size of New Hampshire. Testing products in Estonia is mostly fruitless - the sample size is small enough to be statistically unreliable, even when building a consumer product. Regardless of the limitations, we have connected 80 countries through 300 mobile operators - the largest coverage in the mobile payments industry.

Our highlighting of these numbers is not meant as self-appraisal. Because we don’t have a comfortably large home market, expansion into other countries has been vital for us. It is also something that companies in large, developed countries do not have to worry about and has proven to be a wonderful competitive advantage.


Companies with a large enough user base in the home market are in danger of getting tunnel vision. If you are already at break-even, why would you take the chance of expanding into uncharted territories on other continents? If thinking about launching your product in Brazil or Poland seems risky, it’s because expansion has not been internalized in the company from the get-go. You are essentially giving up on targeting billions of potential customers.


In addition to avoiding risk, another reason for evading expansion is the false assumption that revenue is concentrated in North America and Western Europe. While it is true that the purchasing power in these regions is significantly higher, the other side of the coin is that user acquisition and competition is much tougher as well.

In the mobile payments industry, we can illustrate this disparity by comparing user acquisition costs on the iOS and Android platforms. Android is dominating the emerging markets and user acquisition is almost two times lower than on iOS. Mature consumer economies are flooded with products and services, which means it is much harder for a newcomer to stick out.

One of our most successful markets in terms of revenue is Brazil. This is a country where we have neither an office nor any local employees. There are several reasons why Brazil is huge for companies involved in mobile games:

  • Brazilians has a population of 193 million people
  • Brazil is the second largest market on Facebook after US
  • 31 percent of all men in Brazil are gamers
  • 23 percent of Brazilian Internet users play games regularly


Brazilians love gaming.  So, why wouldn’t you try to enter this market as a game developer? The data above allows us to argue that there is revenue potential there and our own success in Brazil confirms it. However, if you think about your social circle - what percentage of entrepreneurs are planning of expanding into Brazil? It is likely to be very few, as emerging economies are not important for many companies.


If you do decide to differentiate yourself and aim at a market in Latin America, Eastern Europe, Africa or Asia, there key criteria to be considered not usually relevant for US-centric companies:


  1. Language - Forget English.  In Latin America, you need Portuguese (the Brazilian version) and Spanish to guarantee that people can understand you. In Europe, there are 50 countries, most of which have their own language - and so on.
  2. Hardware & connectivity - Not everyone owns the latest MacBook or Galaxy S4 - if your product does not run on less powerful lower-end devices, traction might not be as good as you expected. And if your product needs heavy data usage to work, it would be smart to check what kind of high-speed Internet coverage your target market has.
  3. Design - Open up the homepage of China’s largest instant messaging service QQ and you will notice that it is completely different from what we consider “good” web design. Design is not culturally universal.
  4. Payment options - In Brazil, only one third of the population has credit cards. In order to collect revenue from users, you need to look at what payment methods work in each country - it might be worth considering mobile payments, pre-paid cash cards, etc.
  5. Pricing - The Big Mac Index has a good reason for existing - people in different countries have different purchasing power. Do not expect your product to sell if you are asking for the same prices as in the States.

Emerging markets might seem like a gargantuan challenge at first - foreign, fragmented, and distant. But that’s only because you have not been thinking about them in the past. With China reaching the first position in smartphone sales last year globally, now is the latest point at which you can afford to start reaching out.


Fortumo is a mobile payments company that powers in-app payments for game developers such as Rovio, Gameloft, Vostu and Zeptolab. The company covers 80 countries through 300 operators and lets users make payments on the web and in Android, Windows 8 and Windows Phone apps. For more information about Fortumo, visit For insights into the mobile payments industry, read