With two, if not three industries piling in to the mobile payments space, it is becoming a fascinating spectator sport. News just in that Facebook is about to test a mobile payments application that fills in payments forms using user information raises the bar again. Seen by some as an obvious shot across PayPal’s bows, both companies were quick to tell everyone what good friends they were. PayPal went on to say that competition is a good, thing, right? Interesting.
This news comes on top of news that PayPal is going to trial face recognition as part of the authentication process in the UK – although, according to a 14 year old expert close to BillingViews, you have to ‘make a face’ when you set it up, for it to appear authentic and be more secure. Indeed, some sources understand that Apple has been thinking about, and possibly implementing, facial recognition as well – but whether that is for payments of some kind or unlocking phones and apps remains to be seen.
Meanwhile, mobile Point of Sale (mPOS) is gaining ground quickly, allowing small outlets to take payments on the fly. This, as our Guest Contributor Jonathan Jensen pointed out is excellent news if you have a stall at a trade fair, for instance. It is even being trialed by large retailers in the US.
So, what of NFC? Sadly, like many of the great ideas of the last few years, the news is not good. Just as Joyn, the messaging platform that was to save telcos from those nasty OTT messaging platforms is basically not being taken up, so too NFC takes longer and longer to get a foothold. Oddly, we all know that building things – whether payment platforms, messaging platforms or shopping experience platforms (by which I mean NFC) – by committee seldom works. To add to the woes of experiments like ISIS (rhymes with crisis) Philip Yen, Group Head of Emerging Payments for Mastercard said NFC will take some years to take off and most new payment (or any) technology takes about 10 years to go from trial to ubiquity. Google Wallet is even dropping it.
In the meantime, of course, thoroughly entrepreneurial and commercial folk are busy a) being funded and b) innovating in a way that makes 10 years look like a thousand.
If it was just a case of changing the way people do something, then the market’s cynicism would be unfounded. Remember when we all thought that ATMs were just rude and for a couple of years we went into the bank branch to cash cheques the old fashioned way in a determined yet slightly futile way? That major change came about because banks just forced us to accept a completely new way of getting cash. But here it about evolution and massive competition and that is why the cynicism around NFC is justified. It is but one option and it is not even here yet.
So, who will be winners? Oddly, while our industry bemoans the fact that telcos are ‘in danger’ of becoming bit pipes, Eric Bradlow, Professor of Marketing at The Wharton School believes that the winners will be the guys who own the pipes and infrastructure. He sees them winning as data usage goes ever upwards as a result of increased take up of mobile data generally, fuelled by things like mobile payments.
This is borne out by the now accepted wisdom that proper, direct operator, in-app, billing is the most intuitive, comfortable and safe way of paying for things. As the example of BlueVia, from Telefonica Digital, has shown, Direct Operator Billing has increased their revenues from payments by 300 percent.
Although the game is far from over, that puts telcos in poll position.
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