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New Payment Methods Research Paper


Mobile technology plays a significant role in the everyday life of modern society. Nowadays, mobile phones have a variety of functions and are used not only for making calls but also for other purposes. It is a general opinion that in the future, mobile payments might substitute traditional ones or become a part of reality in financial services marketing.

There are a lot of promising payment methods, such as e-money, PayPal, and crypto-currencies. Still, mobile payments are distinguished among them as a convenient method for retail purchases. They are usually defined as “payments for goods, services, and bills with a mobile device by taking advantage of wireless and other communication technologies” (Dahlberg et al. 266). It is also claimed that “credit cards are often used in large purchases since high fixed costs are disproportionally expensive for small value transactions” (Grüschow et al. 29).

Thus, mobile payments are different from using a mobile phone to access electronic payment services and may be convenient for paying small sums for a ticket on the bus or some grocery in a supermarket.

According to the PEST analysis of the uncontrollable factors such as political, economic, technological, and socio-cultural ones, there is a high possibility of implementing mobile payments successfully. The government would not object to this kind of payment because of its convenience and security, although it is important to note that the safety of such payments has not been studied yet. Using mobile payments for retail purchases might be beneficial from the economic point of view because it might raise retail sales.

The current level of technology allows implementing such kind of payments easily through special software for smartphones. Moreover, such payment services might be beneficial for society because they allow paying for retail purchases easily without using a pin code. The attempts to implement new payment methods usually have mixed results. Still, it is generally recognized that “if sellers face a low fixed cost to adopting the new payment method, then the new payment method is quickly adopted by all participants” (Arifovic 2). Therefore, investing in mobile payments may help the company to gain additional revenue.

According to Porter’s Five Forces analysis, the company will have a competitive position in the market after investing in mobile payments. The technology of such payments is relatively new, and there is no threat that some other new methods will substitute this service in the nearest future. Although, according to some researchers, “social and cultural factors impact the use of mobile payment services as well as comparisons of traditional payment services with mobile payment services lack studies” (Arvidsson 151).

There are no significant competitors in this business at the moment as well. Thus, there is a low possibility of high intensity of competitive rivalry. Due to the novelty of mobile payments, the bargaining power of buyers is small. Still, mobile and Internet service providers might pay the key role in the process of implementing this kind of payment. The role of merchants regarding the aspects of business-to-business payments has not been studied thoroughly as well. Nevertheless, it is expected that the recoupment of such investment will be rather high.

It is a widespread opinion that the potential use of such services as mobile payments by customers is highly motivated. Some researchers emphasize that the adoption of innovations by customers “is often based on the conceptual idea that innovation first is accepted and used by a small group of interested people and then over time diffused to more and more people in the population” (Arvidsson 151).

It is also stated that “the adoption and diffusion of technology have predominantly been observed from the standpoint of user acceptance and utilization, as demonstrated by the wide range of user acceptance models” (Magnier-Watanabe 1043). The usefulness of the service, its quality, independence of location and time, price, and performance are the key factors in its implementation. Thus, potential customers are middle-class office workers and students who are interested in new technologies.

People with higher incomes will also adopt the new payment method willingly. It is expected that younger customers will adopt the service faster. Still, the number of potential adopters would vary depending on the complexity of using the new technology. The cost of the service might be high as it involves the use of expensive smartphones and Internet-provider services.

There should be a number of market activities to encourage customers to use the service. Some researchers state that “mobile payment platforms are built on an interdependent network of companies which adopt different market approaches and are regulated in specific areas, such as the financial and the telecommunication sectors” (De Albuquerque et al. 528). Thus, it is advisable to make contracts with as many shops and stores as possible, so that the potential adopters of the new payment method would feel its advantages. An agreement with public transportation companies and the subway to implement mobile payment for buying tickets will be helpful as well.

There should also be a proper advertisement of the new service, including its promotion through financial organizations to assure the involvement of potential consumers. The promotion should be based on the high security of the new payment method because the problem of adopting other electronic payments is that most of the customers unwillingly give such personal information as numbers of credit cards and phone numbers. To attract customers, the free test period of the service should also be provided.

According to the conducted studies, mobile payments are distinguished as a convenient method for retail purchases. There is a high possibility for the fast adoption of this service by consumers. Therefore, it is advisable for the company to invest in the implementation of mobile payments.

Works Cited

Arifovic, Jasmina, et al. “Adoption of a New Payment System: Theory and Experimental Evidence.” Research Division of the Federal Reserve Bank, vol. 171801, no. 1, 2017, pp. 1-64.

Arvidsson, Niklas. “Consumer Attitudes on Mobile Payment Services: Results from a Proof of Concept Test.” International Journal of Bank Marketing, vol. 32, no. 2, 2014, pp. 150-170.

Dahlberg, Tomi, et al. “A Critical Review of Mobile Payment Research.” Electronic Commerce Research and Applications, vol. 14, no. 5, 2015, pp. 265-284.

De Albuquerque, João Porto, et al. “Mobile Payments: A Scoping Study of the Literature and Issues for Future Research.” Information Development, vol. 32, no. 3, 2016, pp. 527-553.

Grüschow, Robert Maximilian, et al. “How do Different Payment Methods Deliver Cost and Credit Efficiency in Electronic Commerce?” Electronic Commerce Research and Applications, vol. 18, no. 1, 2016, pp. 27-36.

Magnier-Watanabe, Remy. “An Institutional Perspective of Mobile Payment Adoption: The Case of Japan.” 47th Hawaii International Conference on System Science, vol. 1, no. 1, 2014, pp. 1043-1052.

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IvyPanda. (2020, October 29). New Payment Methods. Retrieved from https://ivypanda.com/essays/new-payment-methods/

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"New Payment Methods." IvyPanda, 29 Oct. 2020, ivypanda.com/essays/new-payment-methods/.

1. IvyPanda. "New Payment Methods." October 29, 2020. https://ivypanda.com/essays/new-payment-methods/.


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IvyPanda. "New Payment Methods." October 29, 2020. https://ivypanda.com/essays/new-payment-methods/.

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IvyPanda. 2020. "New Payment Methods." October 29, 2020. https://ivypanda.com/essays/new-payment-methods/.

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IvyPanda. (2020) 'New Payment Methods'. 29 October.

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