The $1 Trillion wallet of the future

The much-discussed mobile wallet is finally about to have its day.

Despite the strong consumer appetite in mobile technology and the many things we can now do with our phones, one of the most glaringly obvious uses in our increasingly connected world – paying for things – has yet to break into the mainstream.

At EE, we’ve made some significant early advances in mobile payments, but until now, the market has taken time to grow for a number of reasons – customer education, industry standards and compatible devices are just three.

Over the next few years, however, I predict a boom in the mobile payments market, and the companies who have got in early and truly understand the industry dynamics and customer behaviours involved will be leading the way.

With more and more devices that allow you to tap-and-pay at the point of sale coming onto the market, and progress around cross-industry compatibility, analysts are predicting that within five years mobile payments is likely to be a mainstream activity for consumers. IDC are predicting it to be a $1 trillion market by 2017.

So here are the three key learnings we’ve taken from our work in this field. They’re the big important issues that the payment providers, technology companies and connectivity players must address to fulfill the potential of this new industry.

1. Usability
The bottom line for consumers is that mobile payments – whether that be NFC technology or a cloud-based mobile wallet – need to be easier and quicker than paying by bank card or cash, probably backed up with the carrot of incentives such as special offers and coupons that are automatically stored and used on the phone. Look at the example of M-Pesa in Kenya, one of the most successful mobile payment systems in the developing world. Theirs is a highly accessible technology in the form of an SMS-based system that allows people to easily deposit, withdraw and transfer money with a mobile device, addressing the basic problem of a lack of access to the banking infrastructure for most citizens in their geography. There has to be a compelling reason for the consumer to switch to mobile payments other than the technology alone. So keep in mind simplicity, ease of use and adding true benefit.

2. Standards
When creating a new market, the difficulty is always to gain consensus in a world of competitive forces. Ultimately, everyone wants to grow the market, but the industry competitors want to win it. That issue is made harder when you’re working across multiple industries with multiple requirements and multiple game-plans. In this case, you have the combined forces of a number of players in the financial services, mobile, handset manufacturer and tech industries who all want to grow – but ultimately win their share – of this $1 trillion pie. As UK mobile operators we’re making some significant steps forward with the creation of Weve, which will deliver a single seamless experience and set of rules not just for the consumer, but importantly for the retailers who simply could not deal with numerous sets of standards, operators, technologies and customer bases.

3. Technology
Penetration of technology such as NFC-enabled phones is still relatively low in the grand scheme of things – but it is growing, as are the number of point-of-sale terminals on the high street. Retailers are starting to see the benefit of buying into a mobile payments, with customer behaviour across many industries moving into mobile. McDonalds, Greggs, and the Post Office are some of the early adopters and innovators in the retail space and others will follow as consumers don’t just engage with, but expect a simple, consistent and hassle-free solution to purchasing the things they want at the touch of a button or the tap of their device.

Long-standing traditional industries are converging around connected technologies and we’re about to see the birth of exciting new digital forms of those businesses and services that we’ve been used to for so many years.

I’d be really interested to hear your thoughts and stories about mobile payments and where you think the industry is heading.

(article by O.Swantee)


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