mobile phone companies find out what consumers, retailers, banks and credit card companies think about the an app (using your phone as a wallet)?
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Mobile payments – on the brink of mainstream acceptance?
Mobile payments were a hot topic around the turn of the millennium, when the dot-com bubble was ripe to burst. At IT fairs, several vending machines offered visitors the option to pay via their mobile phone. Rumour has it that at that point, a poor guy had to sit in each vending machine and throw a can at every call he received.
A decade ago, experts predicted that banks would lose ground on payment services as telecom companies achieved the same outcome using their billing mechanisms. Today the landscape has become even more complex and a variety of new players have entered the fray. Google, PayPal, Facebook, Apple and others are turning their sights on the target of replacing cash, debit cards and other forms of payment with software-based approaches running on mobile devices.
What can traditional and new stakeholders do to ensure they stay in the game? In this paper we offer a fresh perspective, based on a specially commissioned study of European and US consumers, to help players across the board make conscious choices regarding their mobile payment strategies.
While it is too early to predict winners, banks have a clear head start despite their damaged reputations, as they have by and large retained the trust of consumers. However they cannot rest on their laurels. Continued deregulation, coupled with a growing consumer appetite to work with newer players (no doubt catalysed by media attention on bank failures) combine to create an unprecedented opportunity for new players. We see telcos, with their similarly transaction-based business models, continuing to chomp at the heels of the banking sector, particularly in developing countries where they benefit from greater reach. Meanwhile, internet based start-ups are filling in the gaps, creating opportunities and taking mobile payments into new areas.
Consumers are notoriously fickle. Their behaviours depend on transient qualities such as confidence over convenience, peer behaviour and demographic factors such as age and disposable income. All organisations have the potential to respond to these drivers, however their different starting points and attitudes can result in very different approaches and indeed, risks.
Industry research organisation Gartner believes that transactions will reach a volume of $617 billion by 2016, making mobile payments a worthwhile prize by itself, if providers and the technologies they adopt satisfy key consumer expectations (note 1). The ultimate prize for all participants, lies in the current accounts of consumers across the continents. Win a consumer’s main current account, and you own the payments market.
With all to play for, we explore scenarios of how mobile payment models could impact consumers in the future and we provide a strategic framework to enable all organisations to be better equipped for the challenges