Apr 9, 2019

American, Chinese companies compete for U.S. mobile payment adoption

The race is on — between American and Chinese companies alike — to get U.S. consumers to pay for everything with their phones. But as the chart below makes plain, that market barely exists.

Adapted from CivicScience; Chart: Andrew Witherspoon/Axios

Driving the news: Alipay — the mobile payment app from Ant Financial, Alibaba's fintech spinoff — has established a beachhead in the U.S., expanding to thousands of pharmacies, convenience stores and the Mall of America.

  • The company has insisted it is only targeting Chinese tourists, but industry analysts say Alipay has the potential to break open the U.S. market.
  • And Alipay has already spread out of China, says Thad Peterson, a senior analyst with the research firm Aite Group. Scores of consumers in developing countries in Asia have adopted it.

Meanwhile, Apple and Facebook are trying to capture payments, too.

But, but, but: As Axios' Dion Rabouin reports, the U.S. is growing increasingly out of step with the rest of the world. In China and India, cash is quickly becoming obsolete, and in Europe, paying with the phone is catching on as well. But Americans remain attached to their cards.

  • That's because, says David True, an analyst with PayGility, "Paying with a phone today does not offer much if any incremental benefit to paying with a card" in the U.S.
  • Only individual retailers, like Starbucks, which offer rewards for using their mobile payment option, offer any benefit.
  • Last year, Starbucks' payment app had more users than Apple's or Google's.

What to watch: Mobile wallets will start to grab more of the U.S. market in the next five years, says Peterson. The big area for U.S. growth is through contactless cards in mobile wallets that enable "tap and go" paying, he says — but that still keeps cards front and center.

  • There, companies like Apple, which are rolling out cards in partnership with a bank like Goldman Sachs, have the upper hand.

Go deeper

NASCAR driver Ryan Newman hospitalized after fiery Daytona 500 crash

Ryan Newman, driver of the #6 Koch Industries Ford, crashes and flips during the NASCAR Cup Series 62nd Annual Daytona 500 at Daytona International Speedway in Daytona Beach, Florida, on Monday. Photo: Jared C. Tilton/Getty Images

Racing driver Ryan Newman was hospitalized in a serious condition with non-life threatening injuries after his car crashed at the Daytona 500 on Monday, NASCAR said in a statement.

The big picture: The 42-year-old was leading the final lap of the race, won by Denny Hamlin, when his car flipped in the fiery crash. President Trump tweeted after the crash, "Praying for Ryan Newman, a great and brave @NASCARdriver!"

Go deeper: Trump takes presidential limousine for lap at Daytona 500

Bolton indicates more Ukraine details if book prevails WH "censorship"

Former National Security Adviser John Bolton on stage at Duke University in Durham, North Carolina, on Monday. Photo: Melissa Sue Gerrits/Getty Images

Former National Security Adviser John Bolton said during a talk at Duke University in Durham, North Carolina he hopes his new book is "not suppressed" by the White House, according to journalists present in the room.

This is an effort to write history and I did it the best I can. We'll have to see what comes out of the censorship."
Bolton's comments, per Bloomberg and the New York Times

There are warning signs that Nevada could be Iowa all over again

Former Sen. Harry Reid (D) lines up to cast an early vote for the upcoming Nevada Democratic presidential caucus. Photo: Ethan Miller/Getty Images

The alarms are increasingly sounding over Nevada's Democratic caucus, which is just five days away.

Why it matters: Similar issues to the ones that plagued Iowa's caucus seem to be rearing their ugly heads, the WashPost reports.