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Andres Fontao - finnovista

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Payments strategies 2015-2020-2030

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On the mobile payments front at MWC: Much ado about nothing

07 March 2012  |  2828 views  |  1

High expectations were put into place with the series of announcements leading up to MWC last week, as well as during the weeklong event itself. With all the hoopla surrounding the press announcements, joint ventures and acquisitions that transcended geographies, technologies, industries and socio-demographics, it would appear that mobile financial services were finally coming of age. To put it clearly, I had hoped to be wowed by the next big thing in mobile financial services— a compelling value proposition to tap my phone vs. swiping a card, a simple UI that would make it easy to pay my babysitter, a thought-out tablet application which truly leverages the power and context of the device as it applies to banking— but left the fairgrounds feeling as if mobile innovation has stagnated as applied to the financial services sector, and particularly payments.

Most worrisome is that each of the many and diverse initiatives seems headed in its own direction in terms of technology used, standards applied and uses cases that it has been built for. With complexity being the common denominator amongst new mobile payment schemes, it is hard to imagine successful adoption by the time they reach the hands of their consumers. Very few mobile payment services exhibited at MWC, with everything from the NFC-enabled wallets to the USSD-based messaging platforms being demoed, seem to have been designed and built to solve a real, existing problems faced by consumers, merchants, payees or financial institutions today. It was disappointing that no exhibitor shared quantitative data on how much quicker, safer, value-driven their solution was, as compared to payment methods in place today.

Complexity not only arises from the choice of technologies, but also because new players are forcing themselves upon the ecosystem. Organizations from a wide array of industries are vying to lead new business models that involve new players, some of which are unfamiliar with the financial services and payments industries. What’s more, no clear business models have been defined and as such, participants increase complexity in the hopes of improving their positioning for bringing home a larger piece of an unknown pie.

With both the ecosystem and technological complexity hindering any quick proliferation of a winning payments model, it may just be that banks are better positioned to leverage existing infrastructure and business relationships to deliver an enhanced mobile experience to their customers. Most banks today already engage with their customers through their mobile devices, and adding the payment feature to the bank’s existing mobile presence is a natural step in delivering a holistic, integrated mobile financial service to end users.

Like my colleague said to me in more than one occasion as we walked the fairgrounds over the past couple of days— “Paying is boring. Shopping, eating, skiing, etc. is fun.” The challenge for banks will be to leverage existing technology and systems to improve the experience of doing things that are fun for their customers.

TagsMobile & onlinePayments

Comments: (1)

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 08 March, 2012, 14:23

Let me venture out with a few of my own answers to some of your questions:  

  1. "a compelling value proposition to tap my phone vs. swiping a card": Maybe there's none? With the new generation of offers being applied directly to the credit card account, even mobile coupon delivered on mobile wallets has lost its appeal. 
  2. "a simple UI that would make it easy to pay my babysitter": What's wrong with paying with cash? Even assuming the payor wants to go cashless, there's no guarantee that the payee can accept alternative forms of payments. 
  3. "It was disappointing that no exhibitor shared quantitative data on how much quicker ... their solution was, as compared to payment methods in place today.": Maybe their numbers prove what many people have experienced in practice, namely, that nothing is faster than cash or credit card?   

Your friend's comments remind of a recent WIRED article titled "We Don’t Have a Mobile Payment Problem; We Have a Mobile Shopping Problem".

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