Mobile pay chatter is heating up with MWC upon us. Too much of it is nonsense. All of the bickering over which mobile wallet will win is pointless. The argument that NFC has to be implemented across retailers for mobile pay to take off is tiresome. But there may be an opportunity for mobile operators to steal the show amidst this paralysis by analysis and circular debate.
First, let’s just agree right now that the value prop for mobile payments has nothing to do with convenience. There are two things that will encourage people to adopt mobile pay – intelligence and speed. On the intelligence side, the value of mobile pay is having your smartphone tell you what the best way to pay is in any given situation. If people can get more points, benefits, discounts, and cash back by optimizing how they pay, and mobile pay lets them do it, that might be a reason to give it a try.
But, trumping all is speed; this is why the NFC argument is inane. What does an NFC terminal do for me? I wait in line, and save 15 nanoseconds at the register by tapping instead of swiping. Ridiculous. How about – don’t make me wait in line at all. Who can do that for me? If mobile operators are smart, they’ll find a way to make it happen.
Forget POS terminals. If you have a smartphone in hand, you’re carrying your own POS terminal. I can buy $1 million in securities from a mobile app (if I had it to invest). I can buy anything I want from Amazon. So, why can’t I buy a Diet Coke and a bag of goldfish crackers for my kid the same way? I shouldn’t even need a broadband connection do it. If my mobile pay app can just grab the info it needs and send an SMS, we’re done. And I will never wait in line (in the queue) again. Yes, there’s a bit more in it than that, but this general approach tears down the POS/NFC adoption hurdles. It leverages technology that mobile operators already have in place and that we know can handle massive transaction loads.
So, now we come back to the debate over mobile wallets. Who cares? Consumers will use something that’s easy and works. If the mobile operator pushes a standard wallet set-up to existing phones and ships every new phone with the same, many people will adopt it because they won’t have to try to choose among things they don’t understand. That doesn’t mean they can’t choose a different wallet, it just means they don’t have to.
But even with a wallet on board, there’s the issue of user set-up. Many users are too lazy or disinterested to set all of their cards up in their mobile wallets. That’s good for mobile operators. Here’s a rule – Want to put a mobile wallet app on our phones? It has to come pre-loaded with direct-to-bill charging as the default payment method. Consumers don’t want to set up their wallets? No problem. Charge stuff to your mobile bill and then pay your bill with whatever you prefer. You end up with an extra 30 days of float on all of those purchases and a chance to double up on points (mobile operators – offer points…don’t be cheap).
Now, the final hurdle is user adoption. We (BillingViews) are about to release results of a study we’ve done on consumer sentiment towards direct-to-bill mobile pay. Right now, awareness is very low and confusion is high. But enough people are interested to achieve critical mass. So, if mobile operators can raise awareness, reduce confusion, and eliminate the arbitrary technical barriers, they can win. Then everyone from Google to the big banks has to dance to their tune.
I’d say hire some hackers to pull together an easy, consumer-facing, mash up, wallet app that you embed on every phone, and get your engineers to deal with scale, security, and transaction integrity. Own the end-to-end transaction. And use your market power, and control over the device and network, to dictate that any mobile wallet provider has to include direct-to-bill as the default.
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