Wireless operator Orange has commercially launched a pre-paid mobile money service in Caen and Strasbourg, two of the cities with the highest use of contactless payments in France.
I like this idea! As a habitual credit card user who only uses a debit card for cash withdrawals from an ATM, I like the idea of simply topping up a pre-paid card and then 'spending' via my phone as I would cash! Much better than multiple small payments
coming out of my bank account. Shame I'm not in France or using Orange as my Telco! ;0(
The challenge with these "new" payment services is that they need to be much better than the existing one they contest to catch the market. Why bother to register with the provider and download the software in the phone in order to perform the same thing
you can do with a regular, existing contactless card? In order to get a lot of advertisments to your phone? On top of the onboarding issue, you need to learn to use the service. Merchants will soon discover that the "mobile phone" payers take longer time to
serve than the ones with a regular card and this will cool their inetrest. If you do not want to have "a large number of small purchases logged on your current account", then connect your debit card to a new bank account to which you can transfer monies at
choice in real time with your phone. You limit your loss risk to the holdings on the "card account" should you lose the contactless/contact debit card. And you avoid the hassle of paying a monthly credit card bill for purchases you have no intention to revolve
on and an upcoming non-revolver fee - when the interchange fee for credit cards plummets due to regulation asked for by the merchants. So the tools are already there without any mobile phone payments - and therefore most consumers will not bother to get onboard.They
focus on the consumption - not the payment.
This initiative does seem to be taking the very elegant contactless experience and making it more complicated for no obvious consumer benefit.
Very valid points Chaps.
It'll be interesting to see if it swims or sinks!
to £60k base, £100k OTEAnywhere, UK
© Finextra Research 2014