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Feature

In-App Payments

authentication will be challenging; Figure 3: Migration toward In-app Payment
however, biometric authentication
(‘something you are’) on a smart DescripOon Examples
phone (which can also hold an
encryption key or ‘something you POS 1 POS payments In-store
have’) is a compelling option. We e-Comm moving into apps checkout via
expect smart phones to become an app
the platform of choice for payment
authentication and for apps to play Airline
a key role in enablement of payment
use cases. 2 MOTO payments bookings via
moving into apps an app,
While the growth of app commerce rather than
is robust (we estimate growth at
50%+ and accelerating), there is MOTO by phone

transaction outcomes and the Retail goods
quality of payment services
supporting app commerce. For one, 3 E-commerce purchased
fraud management solutions and
services are typically not tailored 12 3 payments moving from an app,
for the unique requirements and
advantages of the app environment. into apps rather than
The nature of app commerce fraud
is unique (e.g. repeated installation e-commerce
and wiping of the app in order to
take advantage of sign-up offers) as In-
are the tools available (e.g. precise App
geo-location and more complex
Source: First Annapolis Consulting market observations.
The customer experience is also
often not optimally designed to be Figure 4: Estimated Sectors Splits for In-app Payments
frictionless, forcing too many steps
or even a 3D secure authentication Other Airlines Grocery
in order to sign up. The development Retail
of mobile wallets and apps such Other
as Apple Pay should help to Other
streamline this experience. App
commerce is simply not the same Financial Airlines Grocery
as e-commerce; rather it requires a Services
unique set of payments capabilities Digital Other Digital
to be optimized. Ground Goods & Retail Goods &
Tran. & Services Services
The acceleration of growth in Una?.
app commerce will help to fuel Financial
the ongoing increase in mobile Gaming & Services Gaming &
payments. Merchants and payment Gambling Gambling
service providers must invest in Ground
mastering this new payments Food Tran. & Food
environment if they are to capitalize Service Una?. Service
on this growth.
Airlines Other
For more information, please
contact Allan Reynolds, Consultant, Grocery Other

specializing in Credit Card Issuing Other Digital Airlines Grocery
in Europe. Retail Goods &
Services Other Digital
Financial Retail Goods &
Services Services

Ground Gaming & Financial Gaming &
Tran. & Gambling Services Gambling
Una?.
Ground
Food Tran. & Food
Service Una?. Service

Source: First Annapolis Consulting analysis and estimates.

U.S. Headquarters Three Park Place, Suite 200 l Annapolis, Maryland 21401 Keizersgracht 313-I l 1016 EE Amsterdam l The Netherlands
© 2016 First Annapolis Consulting, Inc. P:+31 (0)20 530 0360

Reprinted with permission.

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