Mobile Payments -the mobile payments jackpot

Mobile Payments Today (web here) produced a great Infographic that summarizes nicely the current mobile payments ecosystem. From PayPal to Square, to iZettle, most of the current players are represented here. 

As I have covered in previous posts, this area of mobile is heating up and the stakes are very high. As Mobile Payments Today states "...the expectation is that a large percentage of the $6.2 trillion in credit card transactions is going to migrate to mobile".

Expect a new start-up to join the fray every week...

Mobile Money and Mobile Commerce -is now the inflection point?

Back in 2008, I posted my very first entry related to mobile money by blogging about the rise of the mobile wallet here .

Progress has been painfully slow since then, both because of squabbling between the key stakeholders over who owns which part of the ecosytem and also because of the failure to address consumer concern over payment security.

It is inevitable though that mobile money will grow, both because of the increasing convenience of this payment payment (especially for the "unbanked population") and also because of changing consumer attitudes (electronic payment, even on mobile, is safer than carrying cash in your pocket).

Terrapinn produced this nice Infographic last month summarising the history of mobile payments from 1997 up  to today.2011 marked a significant turning point in the evolution of mobile payments with Google launching their Mobile Wallet, making payments simpler (See more in Google's video here).

There is a whole lot more to mobile money than just mobile wallets and a lot of talk is based around mobile payments, especially those using contactless or NFC technology. As Apple´s iOS6 gets set for launch and the new iPhone is tipped to be NFC-enabled, we will see a raft of new mobile payment players rushing to claim their stake in this space.

Sapient has produced a very detailed Infographic with some interesting background information about mobile payments. I have edited the graphic into readable chunks and you can see the first one below. Susbequent ones will follow in a next post.

NFC - The best enabler for the future mobile wallet?

There has been talk of NFC as a big driver of the mobile wallet since at least 2008, and the idea of using NFC has been toyed with by operators for some time. Anything that adds value to what a mobile phone can do is clearly going to be appealing to mobile operators (especially if it locks subscribers in or has a proprietary element to it), though the numbers of different stakeholders involved is still holding back NFC. Retailers, financial institutions, operators and manufacturers all have a role to play but also all have different vested interests in how it should be deployed.

The curious thing is that NFC is touted as the cornerstone of mobile transactions, mobile payments and mobile banking in the future. The reality is that NFC was never conceived for this kind of use case. Born out of RFID technology, some of the earlier uses were in tracking physical goods (from cows to library books!). This is relevant because security and encryption of NFC is a key blocker for further deployement of mobile payments (or other secure uses, like accessing buildings).

Even though NFC chips can only be read optimally at a distance of 20cm, the radio frequencies emitted can be captured a few metres away. I remember attending a panel discussion earlier this year at the Mobile World Congress where a  PayPal executive was asked what was stopping them from developing mobile payments with NFC. The answer was that it was simply not safe enough.

This could change though -if NTT DoCoMo was able to deploy over 100,000 "NFC keys" to their mobile subscribers allowing them to unlock the front door to their homes with their mobile phone back in 2008, then securing NFC transmissions further should be possible.

I believe though that from securing NFC communication for simple use cases like unlocking doors to that of making payments, there is still a long way to go. But then, at the same time, there are sceptics who still believe online use of credit cards is unsafe, so a great deal will be down to popular perception. Apple...please lead the way....