ISIS, the NFC mobile wallet that is about to tested in Salt Lake City and a couple of other cities in the US is still – about to be tested. According to Mobile Payments Today, there are several reasons for the lack of anything happening. Reading between the lines, it comes down to the difference in culture between large telecoms and banking organisations and start-ups. The delays are caused by extra testing of SIM cards, worries that people outside the cities might be able to use the service, but not in the way that they should, training is taking longer than expected and there is an over-riding concern that the customer experience must be sensational from the start. That start, however, is still some way off – but the customer experience has already started and is less than ideal. While they tinker with final adjustments and worry about customer experience and, presumably, job security, other companies are stealing their thunder – Square springs to mind, but there are many others, and I now get weekly lists of mobile money start ups.
BillingViews has been saying for well over a year now that NFC is not the vital component of mobile payments. If Square is on course to process $4billion in 2012, then NFC is certainly not a vital piece of the puzzle and, at best, will become an invisible part of the infrastructure of the future world of shopping – in all its diversity.
We must remember, with all the news and hype about mobile money, it is actually not an over-riding priority for many telecoms operators. A recent straw poll amongst operators at the recent Subex User Conference revealed that 50 percent of a diverse set of operators have not launched any kind of mobile money product or service, and that those who have, very few have been offering them for more than a year. The survey also uncovered a three way split in opinion about who drives mobile money initiatives – the banks, the operators and both. The results were pretty much 33 percent each. The perception about mobile money is that it is the bank that owns the customer.
Meanwhile, half way across the world, a mobile money technology based on the oldest – and most tried and trusted – technology is still growing fast. M-Pesa now employs 50,000 people and is growing at almost 50 percent a year. As such it is becoming ‘invisible,’ part of the fabric of how money works in the regions where it is being launched. Taxi drivers prefer being paid via M-Pesa, many people use their phones as their savings accounts and it is becoming familiar enough that mobile invoicing and payroll are a definite possibility. It works and it is such an overwhelming, life and culture changing success because it solves a problem and enables so many things. And while there are downsides – fraud is a big problem – the thing is this: it works and it fills a need. It is based on SMS, a technology that Gartner believes will drive a mobile payments market worth $617 billion in 2016. The problem with the ISIS trials – or lack of them – is that it is doubtful whether NFC fills a need and we do not yet know if it works.