The economy of the United States is weakened by an astonishing array of imbalances including a record-high trade and budget deficit, along with a record-low national savings. Weakness in the US economy has hardly come as a surprise to economic analysts.
According to the US Department of Commerce Bureau of Economic Analysis, the biggest buyer of US assets is the Central Bank of China. The dollar purchases by foreign central banks played a major role in allowing the US Federal Reserve to pursue its loose monetary policies which have proven to be costly. The US’s annual growth in real GDP has been decreasing steadily since 2006. In quarter four of 2010 real personal income increased by 0.3 percent. The US current account deficit increased $14.1 billion for a total of $123.3 billion in the second quarter of 2010. Currently, the US economy is consistently weakening with no legitimate signs of improvements in the near future.
In contrast, the mobile industry is thriving. The Mobile Marketing Association (MMA) has published an in depth report and analysis on the mobile payments and technology sector. The study explores how the mobile phone is developing into a payment tool that will be used by a rapidly growing number of consumers, with increasing frequency in the future. This will open new revenue channels for mobile operators and third party vendors. In 2009 the mobile payment transaction industry generated $5.2 billion in sales. By 2015, this is expected to reach $56.7 billion, according to ASD Reports. The predicted exponential growth in mobile payments predicts a healthy future for the mobile industry.
Comparing the deteriorating status of the US economy and the growing strength of the mobile industry, it can be concluded that there is very little correlation between how well the US economy performs and how well the mobile payments industry performs. A plausible explanation for the lack of correlation is the way the mobile industry uses mobile devices for micropayments.
Micropayments are lower value purchases that consumers normally make on impulse. Despite the slowing economy, consumers often disregard the small residual fees that accumulate over time. While micropayments are insignificant and manageable for consumers, they yield significant returns when popular.
The invulnerability of the mobile industry to the decline in the worldwide economy gives security to those who invest therein and to those who use mobile technology as a key component of their day to day businesses. Additionally, with prospects this promising, there is a potential for exponential growth if and when the global economy begins to recover.
Erdolo Eromo moved to South Los Angeles from Addis Ababa, Ethiopia at the age of eight. A natural athlete, he played football for powerhouses Crenshaw High School and UCLA. He went on to earn his Executive MBA from Pepperdine University in 2011. Climbing up the corporate ladder in 6 years, Erdolo is one of the youngest senior executives in the mobile industry. He now serves as Senior Vice President of Business Development and Client Relations at Payvia, A leading mobile and online payments company that allows consumers to make simple and secure payments via their mobile phone. He is responsible for identifying opportunities and designing strategies for sales growth. His efforts in the last year alone have grown the company’s annual gross revenues by 400%. By many, Erdolo is considered to be an expert in identifying trends in the mobile commerce space as well as finding new opportunities in which the mobile phone can be used as a billing platform.