There are anticipated technologies that, despite capturing the imagination of technophiles, analysts and journalists, seem to just never arrive as soon as one expects or hope.  

Mobile commerce and mobile wallets are good examples. Year after year, the vision and ambition are strong but the execution and usage is weak. However, there are a number of reasons to expect that 2011 is the year that a tipping point in the use of mobile phones as the ultimate shopping enabler becomes reality. 


The idea of turning your mobile smartphone into a mobile wallet is an appealing one. There is no device that spends as much time in our personal proximity than a mobile phone, much more than wallets.  

What could be nicer than using the intelligence of a smartphone to enable all of the purchases we make today with our wallets? One less accessory to drag around, one less filled pocket and perhaps it can be done with wit and intelligence to save money and be emotionally engaging.

Unfortunately, with a few notable exceptions such as Amazon and eBay, purchasing retail goods and services with a mobile phone can be a challenging user experience putting off all but the most technically persistent.

However there are eight very good reasons to expect significant changes this year that during 2011 will take us much closer to a broader mainstream adoption by users and retailers. 

Near Field Communication (NFC) 

NFC technology when included in your mobile phone enables a secure connection between the phone and another NFC enabled device.  

As a consumer you might use this to get more information about an offer on a product by tapping an NFC enabled shelf price tag (much easier than a bar code). More excitingly, you may be able to make your purchases at the check-out. 

At my local Windsor EAT, I’m looking forward to using those NFC pads at the counter instead of my wallet. You might have also seen these devices in your local petrol stations like BP and others.

Mobile phone manufactures will begin shipping phones with NFC capabilities early this year with announcements from Google, RIM Nokia and others. First out of the blocks is the Nexus S with Android Gingerbread OS. All of the new BlackBerries that have recently been announced have NFC capability.

So at some point in 2011, these new NFC phones and the NFC payment pads will begin to talk to each other.  And when they do, your wallet will be taking a significant step to obsolescence. 

Apple’s iPhone 5 

Not everything that Apple brings to market is a success. I still don’t get Ping and I’m still waiting for the iAd business model to take off.  

However, there is every reason to believe that Apple’s new iPhone 5 will ‘change everything again’ especially with regards to use of your iPhone as a wallet for more than App Store and iTunes purchases. A simple tick of the upgrade box and your iTunes account is now an iWallet.

This device is also expected to support NFC. In fact: in light of all of the patents that Apple have filed for novel uses of NFC technology to pay for everything from entertainment tickets to intelligent checkout baskets some belief that NFC and payments will be the focus of Apple’s new phone.  

Given Apple’s proven ability to build compelling new user journeys and then market them to an enthusiastic user base, iPhone 5 may be the device that takes mobile payments mainstream. (Here’s a leaked photo of the new iPhone case)

Mobile Wallets

True wallet functionality that enables small purchases is being rolled out in 2011 by a variety of operators, manufactures and others. You will be able to not only make purchases but also split a restaurant bill and transfer money to a friend in a way that is easy and fun.  

In the US, Sprint has already released its wallet, which has been a great success since its launch in November 2010.  AT&T, T-Mobile and Verizon are working on their own wallets for launch later this year on a platform called Isis. 

Mobile Vouchering 

Already there are a number of excellent mobile vouchering apps. Watch for solutions where the vouchers are contextually delivered into the mobile wallet enabling ‘one click’ impulse purchases by targeted consumers. 

Affordable mobile solutions for retailers

Tesco, eBay and Amazon have made significant investments and acquisitions over the past few years to remain competitive with each other in the mobile retail space. Most retailers cannot contemplate these levels or types of investments.

In addition, the overhead of implementing mobile payments solutions has been substantial. The transaction costs to retailers to process a mobile order have sometimes been prohibitive. 

The good news for retailers is that platforms are now available that enable a technical integration with existing online solutions that are affordable, easy to implement yet secure.  

The transaction costs are also coming down to a level in line with other existing payment solutions. Leading players in this space to watch include PayPal, Cardinal Commerce, PayThru and Monetise. 

Niche vertical solutions 

There are some products and services where a mobile enabled solution makes for savings, increased revenue and happier customers.  

As my local lunch restaurant and petrol station go live with mobile payments, I really won’t need my wallet most days of the week. These early adopters will introduce consumers to new payment experience.  

Expect to see a number of vertical solutions such as travel and entertainment to be going live this year.

VC Investment 

There are truly colossal sums of investment being made by VCs large and small on the mobile space. Mobile VC investment made up 34% of ALL tech venture investment in 2010, totalling $6.1bn.

Like the dot com bubble of 2000, not all of these investments are going to succeed. However, some will and when added to the shear volume of marketing hype and noise from of established businesses investing in mobile commerce there will be an increasing crescendo driving greater consumer awareness and adoption.

Fear & greed 

In 2010, eBay’s global mobile revenues grew by more than 300% to nearly $2bn, approximately a third of this alone from the UK and Germany. Amazon’s mobile revenues probably grew even more.

Not wishing a repeat of the online shopping revolution where many retailers lost customers and revenue to a new mode of retailing, retailers are now investing in mobile shopping plays.

For mobile operators too, there is the fear that after spending many years nurturing, growing and expanding their relationship with subscribers, that the mobile shopping revolution will relegate them to low margin data pipe utilities and loosing the primary financial relationship. Consequently the large investments are being made by operators to stay in the game.

Ultimately, good mobile payment technology will become mainstream technology if it can make the purchase process easier, more emotionally engaging and financially rewarding to consumers.

Reality check 

It’s going to be a long time yet before wallets become as redundant and unnecessary as wrist watches for we are still at the beginning of this change. And ultimately, for all that my mobile phone does a better job of keeping time, I’ve still got a wristwatch.