May 28th, 2014
from the Federal Reserve Bank of Kansas City
Although adoption of mobile payments has been slow in the United States, recent developments have improved the outlook. New mobile payment technologies, such as barcode, QR code, and the cloud, now compete with NFC (a contactless card reader connects with a chip card using near field communication). Merchants generally view these new technologies as providing more benefits than NFC. Thus, merchants are more actively developing and implementing mobile payment applications using the new technologies.
This article finds among five attributes examined, the effects on merchants of two attributes are clear while three are unclear. Two attributes with clear effects on merchants are customer shopping experience and fragmented markets. Mobile payments and commerce will provide benefits to merchants through customer shopping experience. Enhanced shopping experiences will then encourage consumer adoption of mobile payments and help merchants stay competitive. In contrast, near-term market fragmentation will be a concern. With fragmented technologies and applications, merchants will need to invest heavily and will have difficulty selecting mobile applications suited for them.