{{ searchResult.published_at | date:'d MMMM yyyy' }}

Loading ...
Loading ...

Enter a search term such as “mobile analytics” or browse our content using the filters above.

No_results

That’s not only a poor Scrabble score but we also couldn’t find any results matching “”.
Check your spelling or try broadening your search.

Logo_distressed

Sorry about this, there is a problem with our search at the moment.
Please try again later.

Every part of the mobile supply chain is getting in on the mobile payments act. This is being driven not by technology, but by a shift in consumer behaviour.

GSMA Mobile World Congress in Barcelona had a different buzz about it this year. There were more people there for one thing (unconfirmed reports of 60,000 as opposed to last year’s 43,000– although no doubt someone will correct me if I’m wrong).

Every year for, I think, the past five, people have been proclaiming that this is the year of mobile payments. But this year something had shifted. There was more business done on the stand, hands shaken on deals, and signed distribution contracts.

People weren’t just sniffing around to see what’s round the corner, they were queuing up to see what’s happening now. We’ve already had the first tranche of follow up calls coming in to sign up to mobile payment contracts. There’s definitely a change in the temperature this year.

Every part of the mobile supply chain is trying to get in on the act, and there’s a real scramble going on to win territory.

Handset manufacturers want to put mobile payment provision on their phones or tablets. Network operators and MVNOs want to offer secure payment options.

The banks have realised that mobile banking doesn’t just mean bank statements sent on SMS. App developers are looking for ways of creating in-app payments that don’t send the consumer off to another site and lose them in the process, or that pay most of the purchase cost in commission to the app store.

And just about everyone is waking up to the fact that the consumer is at the heart of this, not the technology.

How far we’ve come from the days when mobile payment meant reverse billing for micro-payments, done via your phone bill.

Consumers are starting to buy big stuff from devices that aren’t fixed Internet points. The iPhone and iPad have a lot to do with this, of course. Suddenly, buying something significant – whether it’s a flight or a the weekly shop – doesn’t seem like a ridiculous thing to do on a mobile device that now has a large, high definition screen.

We’re regularly seeing mobile payments of more than £1,000 going through our system, and M&S reported recently that a customer had bought two sofas worth £3,280 over a mobile phone.

Consumers will adopt mobile payments in the way they adopted internet payments if the way they can pay is familiar to them.

Credit or debit card payments are the way we all pay for stuff now, so this should be replicated in a mobile payment. A long pre-registration process for every website you visit is going to put you off buying (and will turn away those ‘impulse’ buyers that mobile payments are driving).

For the first time, it seems that all the parts of the chain get this. The emphasis has moved away from pushing consumers into using overly complicated technologies or new payment mechanisms, and has gone back to basics. Pay with a credit or debit card, over any platform you like.

Keith Brown

Published 25 February, 2011 by Keith Brown

Keith Brown is Managing Director at paythru and a contributor to Econsultancy. 

4 more posts from this author

Comments (4)

Avatar-blank-50x50

Simon Taylor

Mobile Payments have been coming according to Payments industry press for at least a decade, and despite numerous trials and limited successes (Japan for example)... it hasn't caught on.

It's also VERY important to separate Mobile e-commerce from Payments in a retail store with a Mobile device!! Two distinct challenges.

The issue isn't the technology, the issue is the commercial model. TfL has been aiming to roll out a scheme branded Oyster Card for a few years now. Why haven't they? Everyone takes their cut in the payments world. TfL would be handing over a big chunk of their licence to print money to Mastercard, and the banks involved.

This is a good metaphor for what's holding up regular Mobile Payments. There are 3 approaches.

1) Consortia. Look at Barclays / Orange. We'll see more of this. The problem is, where are the merchants in this model? What is the incentive for a retailer like Tesco or Asda to change their POS terminals?

2) Market Segmentation. Look at Square, or the myriad of mobile payment start ups. Democratizing the network and charges involved, competing more directly with visa / mastercard. Segmentation usually fills a niche rather than taking over the world.

3) Tech companies disrupting. Look at what Apple announced with Starbucks. For me, I think they've done it again. They'll get the early adopters using and loving this thing. What really surprises me is the revenue model though. They want 30% of every purchase. VS the roughly 2% Interchange Visa or Mastercard would take from the store. Without incentives, why should stores accept apple payments? Both Facebook/Paypal and Google are yet to play their hand in this space.

over 5 years ago

Avatar-blank-50x50

Steve Evans

It's worth looking at what Safaricom have been doing with their M-PESA mobile payment system in Kenya, particularly with their tie up with microinsurance providers. Kenyan farmers can buy crop weather insurance on their phones and the phone gets weather updates direct from weather stations. When the weather conditions are bad enough to qualify for a payout it transfers the money directly to their phone MPESA account. Really innovative approach!

over 5 years ago

Avatar-blank-50x50

Simon Taylor

Steve,

The problem with M-PESA, is why would I use it when I have a debit card that works fine?

Great for emerging markets though.

over 5 years ago

Avatar-blank-50x50

Katie Despres

Great post Keith. I agree that all indications seem to point to this being the year that mobile payments become a reality, and that consumers familiarity will pay a major part in how/when people embrace mobile payments. I also think the consumer value prop must be clarified; what do shoppers get out of making mobile purchases? That, I believe, will be the key differentiator between those who can make this technology work and those who cannot. It will be interesting to see what consumers embrace!

over 5 years ago

Comment
No-profile-pic
Save or Cancel
Daily_pulse_signup_wide

Enjoying this article?

Get more just like this, delivered to your inbox.

Keep up to date with the latest analysis, inspiration and learning from the Econsultancy blog with our free Daily Pulse newsletter. Each weekday, you ll receive a hand-picked digest of the latest and greatest articles, as well as snippets of new market data, best practice guides and trends research.