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Pingit - a giant leap or a small step ??

The recent launch of Barclays’ new Pingit app is another significant milestone on the road to true mobile money, taking consumers one step closer to using their phone as their wallet.

While many other banks are working on similar schemes, Barclays has taken the market by surprise with its timing. Going solo on a big innovation like this is a bold and decisive strategy but the bank stands to reap high rewards for delivering a new and valuable service to customers and non-customers alike.

In order to make the most of their first-mover advantage, Barclays will however need to address two key considerations:

  1. Consumers’ security concerns. In a Daily Telegraph poll on launch day, out of 1,500 votes cast, only half expressed confidence in mobile banking. Consumer education remains a key sticking point to widespread adoption. Without a better understanding of mobile financial services, person-to-person mobile services won’t take off. This educational task lies in the hands of the entire industry who will be watching with keen eyes what lessons can be learnt by the trailblazing at Barclays
  2. While Pingit is an exciting development, it is still just one part of the puzzle. The Barclays service offers a smart way to make P2P payments but today’s app doesn’t include any additional services. True digital banking has to encompass so much more, giving consumers loyalty rewards and vouchers, banking and transfer services, account information, as well as payment widgets like Pingit.

Furthermore, the mobile operators are waiting in the wings to take a large slice of the mobile payments pie. According to news reports, the UK’s largest telecom companies, including O2, Orange, T-Mobile and Vodafone, have clubbed together to file an application to the European Commission in order to create a single platform on which mobile payments can run. The lack of standardisation has been a pivotal issue holding back the roll-out of mobile payments but progression on this issue could open the flood-gates for further mobile financial services. With such competition, Barclays and other banks will certainly need to make sure their mobile propositions offer genuine value-add to consumers and stand out amongst the burgeoning crowd.

James Richards - Director, Mobile - Intelligent Environments

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 23 February, 2012, 12:52Be the first to give this comment the thumbs up 0 likes

While any cash-substitute transaction initiated via a mobile phone can be treated as "mobile money", it might be reasonable to associate the term "true mobile money" only to payment methods that run end-to-end on mobile networks and entirely bypass traditional card and banking rails. While Boku, Zong and other GenY Mobile Payments fit the "true mobile money" billing, Barclays' PingIt certainly doesn't, and never will, since it uses the FPS rails, which is an interbank payment network.  

Furthermore, the current version of PingIt reportedly only works if the sender and receiver are both Barclays account holders. Even future versions are expected to permit payments between people who have an account in some bank - Barclays or otherwise - that is connected to FPS. So, "non-customers"  are unlikely to be covered by PingIt - now or ever.

The way I see it, PingIt uses the mobile phone as another form factor to make interbank payments. However, while doing so, it eliminates the friction of having to enter over 100 keystrokes by way of beneficiary name, bank name, account # and sort code. Simply enter the recipient's mobile phone #, hit submit and the payment's made - in that lies PingIt's basic allure for the consumer. It might be tempting to view PingIt more expansively as "true mobile money", "financial services to the unbanked", etc. However - and I'm saying this without intending to take away any credit from Barclays for blazing this trail - such usage scenarios are outside the purview of PingIt.