Fremont: Customers might be ready for wallet payments, but is the market space ready for it? One of the most unusual complicated industry, Payments involves a large number of participants such as banks, merchants’ processors or acquirers, merchants, networks and consumers. Apparently, several big retailers like Wal-Mart and Target are working together to create their own payment gateway.

The increasing use of mobile, especially by tier II and III cities of the world, has presented an opportunity for a rare shift in payment methods. These payment options have offered very large subsidies to major merchants to support their payment initiatives.

Merchants are more concerned about the user experience along with concerns on how complex the transaction is for both the consumer and their employees who need to be trained to process each form of payment if they do not have their own payment gateway. Fragmented solutions that only work for customers for a certain bank or telecom carrier are also undesirable as they address only a small fraction of customers in the store.

Where small retailers opt for other payment gateways such as Google Wallet, Isis, Square, or PayPal for payment and redemption of offers; big retailers want an unregulated access to without a new toll-keeper in between them and the users for both data collection, and the delivery and redemption of offers. These big retailers are trying to shift payment volume to their own cards from whatever other options are available in a mobile wallet.

Also, if mobile payments drive a shift in payment methods, it will also drive a change in the cost of payments for merchants resulting in the potential changes in both the direct cost of acceptance of payments and in the indirect cost like fraud, IT infrastructure upgrades and several others.

For over a decade since the mobile payment has evolved, there has been a battle among banks, payment networks, and merchants over card acceptance fees. These big retailers know their customers better than the companies offering payment solutions. These retailers have spend a great deal of time researching the entire transaction experience from the moment the customer approach the checkout aisle to the moment they are presented their purchases. The retailers want mobile payments as a tool for enriching the customer marketing experience, and not only as a way to move a payment company’s agenda. Also, they would like to use the data collected to provide value added services like targeted coupons and deals to their users.

However, security will be a major issue for all these retailers as hackers will inevitably take advantage of this opportunity. Also, with personal payment gateways being developed by these retailers, consumers would not want to download multiple apps just to pay at different establishments.