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@AlexanderP:

I tend to agree with you and that's partly what I'd meant by "Personally, I find the funding method to be the most faithful representation of a method of payment." That said, I think it'd be very difficult to draw a line between form factor on the one hand and funding method on the other and avoid wondering if PingIt is a "true" mobile payment since it eventually uses a bank a/c as the funding method. I hope you get my drift.

I'm reconciled to having a couple of different definitions but all I ask is for internal consistency within each definition and acceptance of the consequences of the specific definition viz.:

• If somebody uses the expression "mobile payment" to reference every payment made from a mobile, then they must use the expression "desktop payment" to reference every payment made from a desktop.  
• If somebody claims that dongle-based mobile POS is mobile payment even if it only accepts the same old plastic card, then they can't claim that SQUARE will disintermediate banks. 

@AtulG:

TY for your comment. The confusion about what constitutes "mobile payments" is widespread! Let me simply copy-paste below my comment on another post on this subject: 

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If all 'payments involving a mobile phone' should constitute 'mobile payments', fair enough. By the same token, can the popular use be extended to call all payments made from a desktop "desktop payments" and ditto for "laptop payments"? Suddenly struck me that the 'e' in ePayments must stand for 'electric' since none of them will work without electricity.

I always expected different companies to choose different definitions of 'mobile payments' depending upon their vested interests. But, today I came across the same company quoting vastly varying figures for mobile payment spend. In this blog post, SwitchPay says, "U.S. Mobile Payments Expected to Top $1 Billion in 2013" whereas in an infographic on another blog post, the same company proclaims, "MOBILE PAYMENTS USAGE HITS $163.1 BILLION (in 2012)." 

This is getting even more interesting than I expected! 

==========

If all 'payments involving a mobile phone' should constitute 'mobile payments', fair enough. By the same token, can the popular use be extended to call all payments made from a desktop "desktop payments" and ditto for "laptop payments"? Suddenly struck me that the 'e' in ePayments must stand for 'electric' since none of them will work without electricity.

I always expected different companies to choose different definitions of 'mobile payments' depending upon their vested interests. But, today I came across the same company quoting vastly varying figures for mobile payment spend. In this blog post, SwitchPay says, "U.S. Mobile Payments Expected to Top $1 Billion in 2013" whereas in an infographic on another blog post, the same company proclaims, "MOBILE PAYMENTS USAGE HITS $163.1 BILLION (in 2012)." 

This is getting even more interesting than I expected! 

Unless there's a general agreement of what the term "mobile payments" means, I wonder if the question raised in the title of this post would ever be answerable. Agreement can emerge from consensus or by definition. Consensus generally takes very long. That's why I believe it's customary for IEEE, API, APICS, FATF and other industry bodies in virtually every industry to define special terms in a particular way even though the constituent words are in English. I think they do this in order to establish a certain industry-specific taxonomy and thereby prevent wholesale chaos. I strongly feel the need for some industry definition of the term "mobile payments", even if the definition is at gross variance from my current view of the term, so that - on a lighter note - we don't end up with funny experiences like the one described here!

@BrettK: I've gone beyond noting down the date and have published the following post to mark this rare occasion:

Is The US Closed Loop Payment System Increasing Credit Risk?

@BrettK:

Very interesting post. However, since I'm busy responding to comments on my own blog post elsewhere :), I need to restrict my comment to only one thing in your post, namely, Expedited Payments, a topic I've been following ever since FPS went live in May 2008. During the 2 years that I was involved in bidding, winning and implementing FPS for a Top 5 UK bank, I must've come across at least 1000 documents about FPS. While they related to different aspects of FPS, they all used to begin with the same opening paragraph about how The Office of Fair Trade mandated FPS in UK.

My point is, FPS didn't happen in the UK because banks suddenly felt guilty about enjoying 2-5 day float that came with BACS or cheque payments. The same way, Expedited Payments in the US will be driven by legislation, not banks. From my private conversations with people in the FED, whether it was about Expedited Payments or 2 Factor Authentication or whatever, I somehow got the feeling that regulators play the role of a banking industry association far more strongly than that of an industry watchdog in the US. As long as that posture continues, I won't hold my breath about Expedited Payments or 2FA or EMV becoming a reality anytime soon there.

I agree but I fear that vested interests will keep redefining mobile payments the way it suits them. A couple of years ago, they use to claim mobile payments would disintermediate banks. I hardly hear that line any more. Then, they started saying mobile wallet means mobile payment. When mobile wallet adoption went nowhere, they suddenly started claiming mPOS as mobile payments. Wonder if they'll start calling it "tablet payments" when someone installs a SQUARE dongle on a tablet or "electric payments" because it won't work without electricity? Personally, I find the funding method to be the most faithful representation of a method of payment. Cash is cash. Mobile wallet using a bank-issued credit card is still card payment - mobile is just the form factor. If the mobile phone bill is the funding mechanism, then it's true mobile payment - few examples being Dwolla, Zong, Boku, etc. 

I've still not heard back from Adam Brotman of Starbucks but, after re-reading the earnings call transcript, the 30% figure refers to Starbucks Card on plastic + mobile app; mobile app by itself contributed to 10% of spend value. As I've written in my post, this means 90% happens by cash and plastic. That's an overwhelming majority share for non-mobile MOPs. Mobile wallet is still a marginal MOP. If that's the situation at Starbucks, the adoption rate of mobile wallets is bound to even lower at other merchants.

In debunking the business case for a merchant mobile wallet in this post, Ron Shevlin says, "Current interest in mobile wallets among consumers is low". So, GigaOm, Berg Insight and I are not the only ones who feel this way about mobile wallets.

You may be right about reading the tea leaves based on emerging behavior. However, leading indicators are irrelevant in the context of this post which only talks about the past and present scenarios.

I like a good lobster dinner. But, this isn't the occasion for one. Had I predicted the future, I should've taken futuristic projections into account. But I've written only about the past and present, therefore 2012 figures available in the public domain are valid. 

With one quarter still left for 2013 to end, I don't know how eMarketer has already worked out actual figures. But, I'll let that pass for the moment and go ahead with its figure of US$ 640M that I see in the comments. As before, let me attribute all of it to Starbucks mobile app. But, now, I must divide that by 2013 revenues, which I see in the comments to be US$ 14.6B. That works out to 4.38%, slightly better than the 3.75% figure for 2012, but still nowhere near the 30% or even the 10% figure claimed in the comments. As I wrote in my post, the 10% figure mentioned in the WSJ article and few other places should be refererring to the share by transaction volume, not spend - how can GigaOm / Berg Insight / eMarketer all of them get it wrong? Anyway, I've contacted Adam Brotman, the Starbucks executive quoted in these articles with a request for clarification. I'll update my comment if I hear from him.

Last year GigaOm / Berg Insight excluded various other types of spends from mobile wallet. This year eMarketer seems to have done the same, given that it's still reporting only US$ 640M - not US $$$ B - revenues from mobile wallet. I'm sure they've a good reason for doing so. 

Talking of mobile wallet spend expected to grow by 25%, here's a report that predicts that demand for cash will grow by 65%. So much for projections.

@BrettK:

There're so many mistakes in your comment that I don't know where to start. Anyway:

1. "...it is your assumption that ...a mobile in-app purchase of a good or service = mobile wallet". I have made no such assumption.
2. "If 30% of customers in Starbucks are paying with Mobile...". Says who? According to Starbucks' own executive quoted in the WSJ article, the figure is only 10%. 
3. "That doesn't even start to explain the $2Bn in payments via Starbucks App annually, etc.". This figure simply doesn't match any figures I've come across for the Starbucks App. Not from Starbucks itself. Or from the GigaOm article, according to which the real figure is closer to US$ 500M. Assuming there's some sanctity to the US$ 2B figure, maybe 1.5B of that refers to the plastic Starbucks Card, which can't be attributed to its mobile wallet.
4. The data is not mine. I've taken what's available in the public domain. If impartial industry analysts (It's Berg Insight BTW, not "Onavo Insight") exclude Uber and others from mobile wallet spend, if a Starbucks executive wants to credit only 10% - not 30% - of in-store transactions to mobile wallet, they must be doing so for a good reason. I'll have to find a different forum if I want to contest them. 

Drop in the ocean, dismal offtake, etc. - these are some of the expressions I've seen used by the media to describe the current performance of mobile wallets. I'll happily go back to the drawing board if I see any mainstream publication reporting that mobile wallet has reached the mainstream and / or accounts for 30% of payment volume in the USA or any Top 20 country in 2012 or even 2013.