According to the latest research by Juniper, ‘global payments via mobile devices will reach $507 billion this year, a rise of 40 percent.’ The initial reaction at the BillingViews Detective Agency was to welcome the news and to take it at face value. But then one of our top detectives began to get an itchy nose and started to do some digging – not with his actual nose you will be glad to hear.
Towards the end of 2011, BillingViews asked the industry some – rhetorical – questions. We asked them because we had seen a press release from none other than Juniper Research, who predicted that mobile payments would reach a staggering $670 billion by 2015.
Let us leave aside the over-optimistic prediction from two and a half years ago. We could not check the context of the 2011 statistic, in any case, because the press release had been taken down.
The interesting thing is the questions that we were asking back then.
Question 1
Which will be the most popular mobile payment method in three years’ time (by the end of 2014):
1. Carrier billing
2. Google wallet
3. ISIS (or JV between carriers)
4. Contactless credit cards
5. PayPal
Question 2
By the end of 2014 NFC will be:
1. Ubiquitous
2. One of several contactless technologies
3. The only alternative to contactless credit cards
4. Gone
5. Part of the crowd
Question 3
Who will be the dominant players in payments by 2014:
1. Banks
2. Telcos
3. Credit Card companies
4. PayPal
5. Other
At the time, we (the industry, not BillingViews) was convinced that Apple was about to pounce on the payments piece and do something amazing with NFC or similar. Oddly, part of the current Juniper Research now believes that Apple will do something amazing in the payments piece around September this year. BillingViews believes this is becoming more likely but has always believed that, to Apple, payments is simply the last piece of a total experience solution that they would like to own.
What is interesting in Question One from 2011, is that people would now laugh if you had said ISIS and Google Wallet now provokes the reaction ‘Yeah, what is happening with that?’ Meanwhile contactless credit cards, while not revolutionizing anything, are gradually becoming more widespread, climate, culture and existing infrastructure allowing. The meaningful answers would have been either Carrier Billing or PayPal.
Both have produced some interesting developments and news in the last several months – Telefonica with BlueVia and PayPal with a number of initiatives, even, if rumours are true, to the point of offering a white label solution to our friends in Cupertino. BlueVia has an office in Cupertino, manned – in our heads anyway – by one man with one phone and one objective in mind, a phone call from Apple.
The interesting thing about our third question back then is not that any one sector has taken a dominant role but that during 2011 PayPal was obviously so proactive and hyper that we all believed they were about to rule the world of mobile payments. What might have been happening, of course, is that they saw the avalanche of new entrants that was about to fall on us from every angle and make enough noise to make us think that they were the ones to beat. They may have been very wise.
The fascinating one, of course, is Question Two. We asked it because almost everyone believed that NFC was about to be the only game in town.
What, we wondered, two and a half years ago, would be the fate of this incredibly over-hyped payments technology, NFC. Driven by the flagship ISIS, a joint venture between massive telcos and massive payments providers, the world waited. And waited. And waited some more.
What is perhaps odd is that every answer, looked at from the point of view of the 14th April 2014, could be right. And every answer could be wrong.
By the end of 2014 NFC will be:
1. Ubiquitous
2. One of several contactless technologies
3. The only alternative to contactless credit cards
4. Gone
5. Part of the crowd
Ubiquitous? Not yet, and not in payments. The point of NFC is still that it will be the glue that sticks the whole experience (whatever you are experiencing) together.
One of several contactless technologies? Yes – and that is a good thing and a bad thing as it gives merchants choices – and expensive ones. Meanwhile new solutions such as MCX (by the merchants, for the merchants) are looking to be, not surprisingly, the merchants’ choice.
The only alternative to contactless credit cards? Ok, so that seems like a silly question now, but then…
Gone. No, but pretty invisible still (see Ubiquitous).
Part of the crowd? No, not even. But it could yet become the stadium that supports, even houses, those crowds.
What is interesting is the number of new entrants that have appeared from every corner since 2011. Coin, Zapp, MCX, Bitcoin, iBeacon and the rest. The next two and a half years are set to be more interesting than the last.
What will be fascinating in another two or three years will be to see the predictions from Juniper and others at that stage and have another investigation into what has changed between then and 2011 and 2014.
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