Mobile payments is at a tipping point. Like NFC, it seems that the whole eco-system is at the Peak of Gartner’s Inflated Expectations. The big players seem to be stalling – ISIS is basically a ‘no-show’ at CTIAand have circled the wagons. No-one has fully committed and each of the big players are launching their own solutions, Mastercard has just joined the ranks of Visa, Google et al to push their wallet.
PayPal and others have launched – successfully it seems – apps that allow small businesses to accept mobile payments. Merchants are skeptical about installing new infrastructure and terminals in an environment where almost anything could happen. Big merchants like Target and Walmart are rumoured to be collaborating on a mobile payment system of their, presumably inspired by the success of Starbucks’ app which has processed almost 50 million transactions.
Starbucks and other retailers understand shopping – forget payments – and they have been talking to shoppers not banks and payment providers.
Then there is NFC. Will it, won’t it be part of the payments eco-system? Yes, we think, but not as big as we all thought a year ago. It will be one of many solutions. This is already causing confusion for customers who, for the moment are doing what we all do when we are confused – go back to the safe ways of doing things.
Banking itself is being reinvented. What, ask mavericks like Brett King, chief of start up bank Movenbank, is a bank anyway? Forget the payments infrastructure and suddenly mobile phones become point of sale and payments devices. Oyster – automated prepaid travel cards – store money, as does every operator that offers prepaid services. In an ‘old banking’ anecdote, King relates the tale of a bank that complained to the Regulator in Hong Kong that Oyster was behaving like a bank, and asked the Regulator to stop them. The Regulator thought about it and said, ‘yes, they are behaving like a bank, we’ll give them a banking license.’
How it will all pan out is anybody’s guess at the moment. One thing is for sure, without clear leadership – as we have said before – customers will go back to doing what they are comfortable with. They’ll reach for the cash.