"Everything takes longer than you think and then it's suddenly been there all along" That is my pitch on mobile payments in a nutshell and is always followed by the question "Will YOU be ready?" That said some things DO come faster than you think.
The convergence of low cost smartphone and mobile payments has arrived. G-Cash in the Philippines, a mobile payment service targeting the unbanked the last 6-7 years, has launched an Android app. Just a short (4 years) time ago you had to register and transact on the service via '/' delimited SMS messages in a specified format. It was a user experience nightmare that few could get correct without assistance. It was the assumed necessary evil as the masses, we were told, only had access to SMS or USSD.
Step change is occurring rapidly behind the scenes.
Feature phones are disappearing in urban areas and being replaced by Chinese, Indonesian, and Indian low cost android or blackberry handsets. Data is the new killer app as it drives secondary commerce opportunities. Data is certain to slowly become as or more important than network airtime. The evidence is Telcos selling network infrastructure and trading their business model from pushing minutes to driving mobile marketplace margin.
Mobile Marketplaces need mobile payments.
MCB Bank proved in Pakistan that feature phone functionality isn't the real barrier we perceive it to be by reaching consumers with the award winning, transaction generating, Mobile Web only, MCB Mobile service. But that was a bank targeting existing bank customers so it was assumed a higher end consumer and not a relevant peer to mass market services. G-Cash has been targeting the mass prepaid consumer without doubt since launch. The fact that they feel an Android app is worth their effort signals to me that change is happening. This marks the end of the beginning. Expect mobile payment volumes to start to rise over the next 3 years on cost smartphones in disproportion to market penetration. Expect the bandwagon to overflow with followers trying to capture the profitable "prepaid smartphone consumer". Android OS handsets provide the security, customer experience, aspirational feeling, and finally the price point to get large numbers of handsets into the market.
It's only the end of the beginning and the middle might take longer that you think.
Marketplace merchant players and mobile financial services providers will start to see the glimmer of volumes required for real investment in the industry to find the long tail of it's potential.
But are you ready?
- Aaron Oliver
Aaron Oliver has over seven years working in mobile payments and commerce, and close to seventeen years in the information technology industry. He currently works in business development for mobile payments in a global payments company in Singapore.