The global mobile payments ring is about to get a little more crowded as Internet giant Google is reportedly looking to take mobile payments company Softcard off the hands of the telecoms operators that started it five years ago, allegedly for a marginal sum.
Last year has already seen what could be described as a local land grab in the mobile payments space, and SA's landscape is still being primed for the technology to really gather momentum - although, analysts say, the soil is fertile.
Meanwhile, global movement on the front is moving ahead, with news on Friday that Google may be looking to buy "troubled" mobile payments company Softcard. TechCrunch and CNBC cite people familiar with the matter, saying Google is considering buying the company - started by AT&T, Verizon and T-Mobile in 2010 - for under $100 million.
Digital Trends says the move would help Google fend off Apple's growing mobile payments market share, as well as allow the Internet giant and Android maker to compete and overcome some of the hurdles it currently faces. It notes Google Wallet has suffered due to telecoms companies' scepticism and unwillingness to play ball.
In April last year, the Financial Times reported that another Internet giant - Facebook - was planning to launch its own mobile payments service and movement towards this service emerged in October. A lunge at mobile payments from the social network's side would pit Facebook, Google and Apple against each other - a scenario that may arise this year.
Local lunge
Back home, the competition may not be on quite the same scale, but the relatively recent emergence of local mobile payment apps like SnapScan, FlickPay, Zapper and VCPay are evidence SA is bound to see mobile payments being a future growth area.
Ovum analyst Richard Hurst says, while the mobile payment products that have so far launched in SA have yet to gain traction, it is not to say the space is not full of promise - it is just a matter of ironing out the challenges.
There are several reasons for the lack of traction in this area so far, says Hurst. "First of all, there is the cultural perception of end-users and the cost of the transaction. There is a lot of effort going into more cost-effective [ways of making mobile payments].
"At the same time, there are now a lot more companies throwing their hat into the ring to get in on some of the action as and when it appears. It is full of promise, it needs to be realised."
He says another inevitable challenge is the "two-step dance" between financial providers and telecoms operators. "Once these things are ironed out, this should be a big growth area for financial services."
Hurst says it is still early days for the "niche, innovative" players that have entered the local ring, but they are unlikely to fall by the wayside. "As and when the larger players gain a foothold in this area, they are likely to acquire these players."
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