BUS188 Case Analysis 1 YHe
“Mobile Wallet” Case Analysis
1. What is the fundamental reason George couldn 't ditch his wallet?
The fundamental reason George couldn 't ditch his wallet is because most of his favorite retailers do not subscribe to his service provider 's payment system. While in Japan and countries like China, South Korea, and India, corporations have been developing partnerships between multiple entities and standardization on the mobile payment platform, the United States hasn 't adapted this method as successfully as it could. According to Gartner, the mobile payment market will increase from $171 billion in 2012 to $646 billion in 2017 worldwide, but the United States only shares 14% in the global payment market and expected to remain the same for the next 5 years. The growth in the market is so significant, there are many stakeholders striving for a share of it. However, instead of cooperating with the service providers and handset vendors, and standardizing the system, the players compete with each other by developing their own technologies, such as Bluetooth Payment System, Closed Loop Mobile Payments, and Cloud-based mobile payment platform. Service providers see the opportunities and try to take advantage of the technology by charging an exchange fee for every transaction made. In order to avoid the exchange fee, retailers have no choice but owning their own payment network. Therefore, George 's new Google Nexus phone couldn 't be used for all these different payment system, and he is stuck with paying the old-fashion way - credit cards.
6. Draw the transaction flow from a consumer purchase to the supplier of goods/services. Who gets a cut of the transaction (i.e., transaction fee) and how much is it?
Every time when a transaction goes through and money is being transferred from the customer’s bank to supplier’s bank, banks and credit card companies get a cut of the transaction fee, which is also called interchange fee. Interchange fees can vary depending on
1. What is the fundamental reason George couldn 't ditch his wallet?
The fundamental reason George couldn 't ditch his wallet is because most of his favorite retailers do not subscribe to his service provider 's payment system. While in Japan and countries like China, South Korea, and India, corporations have been developing partnerships between multiple entities and standardization on the mobile payment platform, the United States hasn 't adapted this method as successfully as it could. According to Gartner, the mobile payment market will increase from $171 billion in 2012 to $646 billion in 2017 worldwide, but the United States only shares 14% in the global payment market and expected to remain the same for the next 5 years. The growth in the market is so significant, there are many stakeholders striving for a share of it. However, instead of cooperating with the service providers and handset vendors, and standardizing the system, the players compete with each other by developing their own technologies, such as Bluetooth Payment System, Closed Loop Mobile Payments, and Cloud-based mobile payment platform. Service providers see the opportunities and try to take advantage of the technology by charging an exchange fee for every transaction made. In order to avoid the exchange fee, retailers have no choice but owning their own payment network. Therefore, George 's new Google Nexus phone couldn 't be used for all these different payment system, and he is stuck with paying the old-fashion way - credit cards.
6. Draw the transaction flow from a consumer purchase to the supplier of goods/services. Who gets a cut of the transaction (i.e., transaction fee) and how much is it?
Every time when a transaction goes through and money is being transferred from the customer’s bank to supplier’s bank, banks and credit card companies get a cut of the transaction fee, which is also called interchange fee. Interchange fees can vary depending on
Cited: Admin. “New Field Communication Versus Bluetooth.” Newfieldcommunication.org Admin. “New Field Communication Technology Standards.” Newfieldcommunication.org Etherington, Darrell. “Forrester:U.S. Mobile Payments Market Predicted To Reach $90B By 2017, Up From $12.8B In 2012.” Techcrunch.com. 16 Jan. 2013 Helft, Miguel. “Apple Wallet To Take Aim At Growing Mobile Payments Market.” Fortune.com. 4 Sept. 20 Thriggs, Rob. “What is NFC? & How Does It Work?” Androidauthority.com. 21 Sept. 2013 14