OT-Morpho Lays Out The Four Stages of Payments

There tend to be four stages involved in how a given region’s payments technology evolves, according to OT-Morpho Marketing Payment Director Jesper Domargård.

OT-Morpho Lays Out The Four Stages of PaymentsWriting on his company’s website, Domargård asserts that a given region will tend to move from cash to magnetic stripe payment cards, then to EMV chip cards, and then to contactless payment cards, with the last step being the leap to mobile payments. But as Domargård notes, sometimes this stages can be more or less skipped. In Kenya, for instance, a mobile payments solution called M-Pesa allowed many citizens to leapfrog from cash to mobile payments. Meanwhile, India’s government has been trying to rush progress to digital currency as part of a larger digitization initiative, and has helped to support the emergence of a payments system leveraging merchants’ smartphones and designed to work with the company’s biometric ID program.

But in general, Domargård asserts, mobile payment adoption rates “have fallen somewhat short of expectations”. He suggests that fast food restaurants are leading the charge, but even they expect mobile orders to comprise only 10 percent of sales by 2020.

Still, mobile payments have not simply fizzled out since emerging onto the market, and it seems likely that they’ll play a growing role going forward alongside more traditional payments. Meanwhile, groundbreaking new ‘naked payments’ systems that directly link payment accounts to accountholder biometrics are only just starting to emerge, and given their convenience, they could point toward a fifth stage of payments development to come.