Dutch banks and telcos have called time on a joint venture established to introduce a national mobile wallet service.
"The first priority remains the introduction of pay at the checkout with the mobile phone,"
So that means back to the partnering with the card issuers and using the existing transaction capture/processing rails, putting an Operator branding on the service and maybe adding an Operator Wallet. Its very hard to improve on the cost dynamics that the
incuments enjoy. iZettle and Square are truly disruptive attempts to do it. Banks do a good job at protecting their business (for which they have a government issued license) and Operators remain cautious about competing directly with that, since they are
also trading partners, let alone the risk management commitment they could get into.
But micro-billing, under the 20Euro level of transaction, is perfect to add to the Operator Bill rather than from a Credit Card. Both sources need to be replenished from a bank account (or could be PrePaid), and is good for the un(der)banked consumer.
So - expect a lot of Mobile Operator Wallets to enter and compete with Google, PayPal Mobile, Amex, PingIt etc etc, and for those other wallets to be topped up by Carrier Bill as an option to Credit/Bank.
Surely, it isn't as simple as allowing payments up to €20 to go on customer's mobile bill. There is the whole trust issue (do people really trust the MNOs to handle payments) and there will also be a requirement for a fairly substantial dispute resolution
process, which the MNOs will need to deploy and which will be more complex given the large number of pre-paid, non-account customers. It will be interesting to see how it develops.
Secondly, does anyone really want a mobile wallet rather than a central wallet accessed via their mobile, as per the existing payment scheme approach.
© Finextra Research 2013