The Uberization of Mobile Payments?

Every innovation strives to be the next Uber of its industry. Tech startups dream of providing a solution that perfectly meets the needs of consumers who are unhappy with the existing options. We have seen this scenario play out across different sectors. From Uber to AirBnB to TaskRabbit, technologies have emerged that have offered digital platforms to connect eager consumers directly with willing service providers. They have been developed by enterprising new kids on the block looking to steal the thunder of the leading players already established in their industries. But have we seen the Uberization of the payments space? Can any of the countless third-party mobile payment options and mobile wallets that have emerged in recent years be described as the ‘Uber of Payments’? And if not, why not?

The Characteristics of Uberization

Not only did Uber, AirBnB and TaskRabbit successfully disrupt their respective industries – transport, accommodation and freelance labor – they each incorporated certain key elements. At a basic level, each targeted markets where many consumers desired more convenient, competitively priced and/or readily available options. They also offered mobile solutions that facilitated peer-to-peer transactions, cut out the middle man by enabling customers and service providers to connect and incorporated some form of rating system.

Analyzing Existing Mobile Payment Options

How many existing mobile payment tools exhibit the key elements that form the basis of Uberization? Overlooking the need to cut out the middle man or provide a rating system, all payment services provide a mobile solution to execute payments. Some, like Venmo and Square Cash, have even facilitated peer-to-peer transactions.

But it is at the more basic level that these payment solutions and mobile wallets fail to meet the key characteristic of Uberization: they do not target a market where considerable numbers of people are in need of an alternative to the existing options.

The Absence of a Genuine Added Value  

Common to the solutions provided by Uber, AirBnB and TaskRabbit is the fact that they each provided people with something they really needed, which was not adequately offered by the established players in their respective sectors. Bucking the trend in those industries, they enabled consumers to conveniently harness the underutilized assets and resources of others to meet a particular demand – be it the need to get from A to B, to find somewhere to stay or engage a particular service provider in their neighborhood. At the same time, they allowed people to create additional revenue streams by monetizing their belongings or skills.

By contrast, third-party mobile payment tools and mobile wallets as they currently exist are not targeted at a market where people have a significant desire for an alternative to the existing options. The benefit offered by these services is not compelling enough for most users to choose them over options provided by the traditional players.

When it comes to sending money to friends it can be argued that there isn’t a significant added value to using the peer-to-peer features offered by PayPal or Venmo over the transfer features of banking apps that leverage the clearXchange payments network. A recent report from Clarabridge found that consumers in the US overwhelmingly prefer to use their bank’s apps to transfer money more than third party apps like Venmo and PayPal (43% vs. 26%).[1]

The same issue exists with mobile wallets. As things stand, there simply isn’t a strong motivating factor for people to pay with a mobile wallet – like Apple Pay, Android Pay or Samsung Pay – instead of their credit or debit cards. And this lack of a genuine added value has meant the three major ‘Pays’ have struggled to drive repeat purchases. A report from Javelin Strategy and Research stated that the lack of clear consumer value has constrained adoption of these mobile wallets for in-store purchases, with just 3% of consumers having used Samsung Pay in the past month in 2016, 5% using Android Pay, and 8% turning to Apple Pay.[2]

Creating Value That Existing Options Cannot

Speaking on the release of the Javelin report, Emmett Higdon, Director of Mobile at Javelin stated that: “By continuing to focus solely on their role as a replacement for plastic payment cards, the Pays are missing valuable opportunities to enhance the overall purchase experience and create value where cards alone cannot.”[3]

In essence that is the challenge providers of mobile payment solutions have to meet to demonstrate the key characteristic of Uberization. They must fully harness the capabilities of modern mobile devices to provide additional features that offer value beyond simply the ability to make a payment – something more than traditional payment options. Only then will they be seen as the Uber of Payments.

Maxime de Nanclas, COO and co-founder of Mobeewave.



[1] Clarabridge ‘Clarabridge Survey Finds that Banks Need to Bolster Customer Experience’ (August 19, 2016):

[2] Javelin Strategy and Research, ‘Apple, Android and Samsung “Pays” Fail to Drive Repeat Mobile Wallet Purchases’ (August 17, 2016):

[3] Javelin Strategy and Research, ‘Apple, Android and Samsung “Pays” Fail to Drive Repeat Mobile Wallet Purchases’ (August 17, 2016):

Written by Maxime de Nanclas