25 April 2018
Nanda Kumar

Digitalised Banking

Nanda Kumar - SunTec Business Solutions

30Posts 159,508Views 0Comments

Muddy waters: future of mobile payments as unclear as ever

27 May 2014  |  5426 views  |  0

Recent news that Isis, the US telco-based mobile payments platform, is growing at a rate of 20,000 users a day, was welcomed as validation by the cheerleaders of mobile banking. For the rest of us – those of us who just want to see more customer-friendly financial services by whatever means works best – the Isis news merely confirmed that mobile payments technology has the potential to help achieve this.


Quite apart from the fact that Isis seems to have been used to ‘pay’ for many things that are actually free, it’s not at all clear how the competitive landscape for mobile payments will develop in the near future. Anything that makes it easier and faster for consumers to get through their day is to be welcomed. But, until it can be relied upon to be available in the majority of situations, no one system is likely to gain market dominance.


Isis is a rare instance of legacy service providers stealing a march on the digital leaders, but the first-mover advantage may not last long. As some industry watchers have pointed out, Google’s support for the software-based Host Card Emulation means that it can by-pass the telcos, and it could use its ties with handset manufacturers to push adoption of the protocol. Ripple is another system with a great deal of potential but, with so many alternatives, it can be hard to tell what is a real glimpse of the future, and what is just hype.


If banks are to remain an integral part of the payments ecosystem, then they cannot afford to be dazzled by new technologies and emerging protocols. Indeed, there are considerable opportunities waiting to be taken. In spite of the events of recent years, banks are still amongst the institutions that consumers trust most to look after their money. It will take a long time for new payments players to build up this level of respect, and banks should use this advantage to push themselves into the heart of the emerging mobile payments ecosystem.


A shift from batch-based to real-time processing, and better middleware integration between mobile payments facilities and banking apps mean that banks could potentially add a number of value-added services on top of mobile payment facilities. If banks can move fast enough to remain at the heart of payment technology in the mobile payment era, then the added insight into customers’ spending habits could add a valuable extra dimension to their product development and marketing efforts.


The organisations that flourish will be those that make the most of their customer data, wherever they manage to fit into the payments ecosystem of the future. Better use of data means better insight into how services fit into consumers’ lifestyles, and can inform the development of products to suit them. Mobile payments does offer the prospect of truly seamless commerce and transactions but, for it to fulfil that potential, there will need to be some consolidation in the market, and a much greater degree of merchant buy-in. Similarly, there are real opportunities for banks, if they can use the adoption of mobile payments to get closer to their customers. If banks can move quickly and flexibly to offer new products, services and partnerships, then mobile payments should present a huge opportunity, not a threat.


TagsMobile & onlineRetail banking

Comments: (0)

Comment on this story (membership required)

Latest posts from Nanda

High stakes: become a true value aggregator or lose your market share

07 September 2017  |  4804 views  |  0 comments | recomends Recommends 0 TagsRisk & regulationOpen APIsGroupDigital Banking Trends

Are APIs the new goldmine for banks?

12 July 2017  |  8162 views  |  0 comments | recomends Recommends 0 TagsRisk & regulationInnovationGroupTrends in Financial Services

The challenges banks are facing with Open Banking

12 June 2017  |  12056 views  |  1 comments | recomends Recommends 0 TagsRisk & regulationRetail bankingOpen APIs

Customer obsession is the only way banks will survive

26 April 2017  |  6800 views  |  0 comments | recomends Recommends 0 TagsRetail bankingInnovation

Simplifying and standardising the Indian taxation system with GST Act

06 March 2017  |  4652 views  |  0 comments | recomends Recommends 0 TagsRetail bankingInnovation

Nanda's profile

job title CEO
location Trivandrum
member since 2013
Summary profile See full profile »
Nanda Kumar has been active in the software realm for over 26 years as a technology evangelist for customer-centric software platforms and solutions, specifically for the pricing and billing requireme...

Nanda's expertise

Member since 2013
30 posts0 comments
What Nanda reads

Who's commenting on Nanda's posts

Mouli Srinivasan
Edmund Ingham