The mobile payment industry has stagnated at the trial phase for the past years. This slow uptake has been attributed to a number of reasons, from the underdevelopment of the mobile payment ecosystem to the lack of NFC-enabled handsets for users. The absence of handset options, in particular, has been blamed for the underwhelming user reception to mobile payments.
New tools have since emerged in a bid to address this issue, touting abilities to convert any mobile phones into credit card readers.
According to Reuben Foong, smart cards research analyst with Frost & Sullivan, it is still "early days" for mobile payment and banks need to drive public education efforts to spur adoption.
Asked about the new tools, he told that the regulatory approval and process needed to bring these credit card-reading devices to Asia does not differ much from that of traditional credit card readers, which all require approval from credit card companies and retail banking institutions for transactions to be processed.
However, Foong noted that pushing the adoption of these products will require "strong marketing initiatives" on the part of the device makers, in order to convince both the public and banks about the value of the portable readers, he said.
The public also needs to be educated on the benefits and potential applications of such devices, he added.
Banks, in turn, would be spurred to roll out credit card companion devices if there is demand for them, he said, noting the rising credit card adoption rate in the region.
Vendors of these payment products could also seek partnerships with banks, involving device promotions or giveaways, to encourage take-up, said the analyst.
One barrier Foong sees hindering the implementation of such readers in Asia is the deployment of smart card-based credit cards in the region.
The credit card attachments employ older magnetic strip technology, which is less secure and reliable compared to those embedded with smart card chips, he said.
The analyst added that most countries in the region have moved toward the chip-based cards, and as a result, may find the reader attachments less than ideal.
Online payment vendor, PayPal, last week announced it will allow users in the Asia-Pacific region to make mobile payment via the company's mobile app and Web site. Users can send funds to another individual and check their account balances from their mobile handsets.