On 'shoe payments'

Alexander,

Nice in theory, if a little academic. 

However, in the end how does a customer describe a Starbucks Payment, buying a Kindle from the Amazon store on their phone, or using Uber to take a cab? They don't define these as card payments, m-commerce transactions, or closed-loop payments, they think of them and classify them as mobile payments.

The thing is, regardless of the academic definition, the key here in terms of disruption to traditional distribution models is behavior, modality and friction, and even if there is a credit or debit card at the back-end of a mobile initiated payment, a consumer's behavior has been fundamentally altered from the traditional approach to the payment problem. 

This results in significant shifts in the distribution chain. Buying a book on Amazon is still buying a book, and the back-end production or manufacturing process of the book remains largely unchanged, but the distribution landscape has been completely turned on it's head - just ask Borders. 

You don't need to adhere to a classical or academic definition of a 'payment' if in the end altered human behavior results in massive disruption to the front-end layer of the business. It's still all about the role that mobile has played in defining the new owners of the customer experience and how quickly the incumbents are rendered obsolete.

What decisions will Starbucks make in respect to the way they sell coffee with 30-50% of their customers abandoning cards and cash in favor of a mobile app over the next couple of years? How much will Uber change the dynamic of the taxi industry? What will happen to cinema box offices when the majority of tickets are bought through a mobile device?

These are material business model changes based on behavior. The fact that technically a card was used to top-up the Starbucks App, or was at the back end of the Uber/Fandango process doesn't change the fact that a consumer now makes a very different, conscious decision not to pull out his credit card in those payment instances ,and that my friend, is what kills incumbent businesses.

See US Postal Service, Polaroid, Blockbuster, Encyclopeadia Britannica, Borders, Kodak, HMV, etc for more information.

I'm amazed that even though we've seen this play out time and time again, across multiple industries and models, that incumbent players still think that their particular business is immune from disruption because 'they're different' or exceptional in some way. This cycle has been playing out for hundreds of years as markets change, it is just life.

Consumer behavior is the killer app - not the mobile wallet.

BK

Brett,

I am surprised my view came across as "luddite vs nihilist": at least, I never counted you in the latter category even though your books are still available in the "dead trees" format and can be bought in the old-fashioned way - in store, with uncool cash. (I am, though, surprised you are still using a publisher instead of the emerging "self-publish" model... I guess it's one of those "don't fix it if it ain't broken" cases...)

My point was not about "status quo works" - after all, my company is bringing to the mass transit market the most disruptive solution in decades (for our latest pilot programme, we even got US$1.5m investment from the UK Government).

My point was simple (if we take a broader view at our specific "what are mobile payments" discussion): consumers don't choose NEW experience, they choose a BETTER one.

Until all the major players (Cardschemes, OEM’S and Telco’s) sit around a table and play nicely – and agree interoperability models and methods of channel convergence “mobile payments” will remain one-trick-pony discrete applications.

Current deployment models are fraught with unforeseen or unanticipated issues (or severe lack of foresight).  What if I want to have more than one payment application in a mobile wallet?  What if I want Visa, MasterCard or UnionPay applications in the same wallet (or perhaps my loyalty applications too)?

Right now – even the keenest of individuals are having a tough time trying to pay with NFC – too many concrete blocks in the way and not enough people removing them.

It will be very interesting to see what Visa Europe has up it’s sleeve in December (2013).