KBW Analysts Discuss Mobile Payments

In a report published Tuesday, Keefe, Bruyette & Woods analyst Sanjay Sakhrani discussed mobile payments following the Transact 15 (Electronic Transactions Association) conference in San Francisco. "While there is a lot of buzz around mobile payments, it remains a work in progress given the current limited acceptance at retailers in North America," Sakhrani wrote. "Many industry participants believe that consumers will not have just one mobile payment app on his/her phone (much like consumers currently carrying multiple credit/debit cards) with the mix dependent upon the success of the app." Sakhrani continued that there are also concerns around the ultimate rate of adoption as evidenced by the penetration of

payment app that appears to have plateaued at 15 percent to 16 percent. The analyst also discussed how merchants want to push back the October 2015

into 2016 to give them more time to comply with the changes. In addition, merchants stated that while the cost of interchange has been coming down around the world, U.S. merchants continue to pay the highest price in the world and that government regulation and anti-trust suits are the only way to reduce the rates. Sakhrani concluded that mobile payments presents a large opportunity for the entire space. While progress continues to be made, it is still in the early days and the space will continue to evolve over time with many different potential permutations.