This is a question I am thinking of for some period now. Innovation in payments is made for the customer... most at least! But it is all going so fast, that I wonder how long the Industry will be able to make profits out of it.
Of course, as in many topics I am just a newbie asking himself some dull questions from time to time. But last week Chris Skinner blogged on
'The next gen Mobile'. Chris starts with describing the evolution of branche usage, from underbanked economies through emerging economies to developed economies.
Anyway, I suggest you read it yourself, it is definately worth it!
Later he continues with the technological evolution of mobile payments innovation. And that is where I fell the rush to write another post ;). In summary Chris mentions the following evolution:
The first generaion was an SMS-based payments solutions, the second had additional bank account services thanks to the WAP-technology, the third it the one where every single smartphonebrand has its own applications for a better banking service, now we are
already in the
fourth generation of mobile banking services.
The fourth generation has brand-independent apps and a lot more services, trying to cover all banking aspects. But that is not the end of his history class, since he ends with the next gen mobile service: the chip-neutral device. Instead of EMV for cards,
SIM for phones, RFID and NFC for contactless he believes (and honestly, me too) that all this will be put in one neutral device!
Now think about how long our Human Nation has worked on all these Innovations! It didn't take a very long period, did it? Examples like this make me understand somehow why banks are more of less hesitant in Innovating. Many of us are surprised they didn't
jump on mobile yet in developed economies. I guess by then it wasn't really worth investing in yet, unless your core would be mirco payments maybe.
Now many banks are jumping on Mobile and they work together with Telcos, but if these chip-neutral devices become affordable, we need a new standard again. Thank God these days open source gives us the apps for free many times, a trend to continue as well
The real question each time is: is this really making the life of consumers better? If we go a bit further the question could be: how long are consumer going to be able to follow these trends of Innovation?
Because what is going to be next? No more chip at all? That bring us back to
biometrics. You use biometric modalitied and a PIN instead of a chip. This biometric modality can as well be read or scanned by mobile phones and POS- terminals shouldn't be a problem either, as long as there is a critical mass willing to invest in it.
You only need the payments platform to process all these different payments, a payments provider or banks should be able to connect every channel with no matter which payments modality. That bring us back to my previous topic: the
Universal Payments Module.
What will be next?? I guess channels can always be made better, just don't know how yet. Or when?
It seems like everything is going faster and faster and faster, so be surprised of the speed this evolution in payments... unless consumers are not interested anymore in all these fancy aspects of mobile banking or other banking methods.
But that is not for tomorrow I guess...or is it?