Looking back through the payments predictions for this year I had an ‘Oh No, here we go again’ moment. This is the year of mobile payments, ‘they’ say, or ‘this is the year of mobile wallets’ and even ‘this is the year that Apple finally put NFC into an iPhone’. I do not think so – on any count.
My mind went back to the early days of the Internet (not that long ago), to a Billing conference in Paris (one of the ‘good old ones’). I was c0-chairing a session on how disruptive the Internet was going to be – at the time, the Internet was not much more than an irritation or innovation depending on who you worked for. Bill Gates was still unsure it would become mainstream, let alone a way of life. My co Chair, dazzling in a very bright bow tie, was at the lectern in the accustomed place and I, feeling wind swept and cool – or ‘scruffy’ as one colleague described it – in collarless shirt and jeans, was hidden amongst the audience. My co Chair signaled for the lights to be dimmed, leaned forward to begin the session, and from within the audience I said, standing up dramatically, “one day soon your jobs and your companies will be under threat from people dressed like me.”
The audience did the double take we hoped for, looked around and found me – Scruffy – standing there. There was an embarrassed pause, a smattering of laughter and the audience turned back towards the front in a ‘yeah, right!’ kind of way. The session continued. I sat down, deflated.
That reaction would probably have been the same if it had happened two years ago and the subject had been mobile payments. We tend to forget the resources that large companies can bring to bear on a problem when they need to. And telcos are amongst the largest of large companies. And they don’t need to yet. They tend to wait until some new phenomenon has proved itself to be a run away success and then go out and buy start ups.
We are not quite at this point yet. This year will not be the year of mobile wallets, it will be another year of equal disruption and innovation in a market that, ultimately, will be dominated by the dominant.
Start ups (like iZettle, Movenbank, uKash and others) will continue to start. Joint ventures will get the headlines and then fade, retailers will do their own thing, banks and payment processors will lumber along appearing to move slowly compared to the start ups and this time next year, nothing will really have changed and the predictions will be that 2014 will be the year of mobile payments, mobile wallets and in 2014 Apple will definitely, certain sure, launch the iPhone 7 with NFC in it. Apple is, to me, very unlikely to put NFC into a phone until there is a very clear reason to do so, particularly after the Maps debacle. Right now there is no clear – payments – reason to put NFC into a phone (there may be another reason around their recent ‘gifting technology’ patent).
And then, over the next three or four years, the start ups will be bought by the large companies for what will seem like massive valuations. It is how life works. It is what happened when the irritating thing called the Internet went mainstream. The only difference when it comes to payments is that the larger companies are not from just one industry but the boundaries of everything are blurring so that makes sense too.
And the reason that we are ‘not there yet’ is that the theory that it is easier, quicker, better or more secure to use your phone as a payment device is not yet fully proven. Apart from the conventional arguments, how would it be if you couldn’t open your wallet when the bill arrived because the battery had run out.