The EDC 2009 Global Payments Survey suggested that in the USA, the mobile would replace the wallet over the coming half decade. A bold statement indeed, and something we have all heard before. It’s an argument that is winning traction since Square has won itself a lot of attention, mostly for some snazzy web design, and having a certain Jack Dorsey at its helm.
The problem facing these upstarts is that some very exciting companies are trying to create a solution where the consumer doesn’t see a problem. Perhaps the greatest degree of disruption will come from developing economies. Payment processors and banks have been attempting to load these territories with credit cards. Whilst this might give a short term revenue burst, where is the strategy?
Africans are already using SMS as a form of payment, because its simple and low tech. Payments in the western world need to be simpler, and have no barrier to entry for the consumer. The consumer has a phone, and has a bank account. They don’t have a payment mechanism that works as well as the card.
Until that is the case, we’re in an interesting but risky place with mobile. mPayy and oboPay both show a lot of promise in solving the Mobile Payments problem. However until someone is able to package this service and sell it to the banks, Mobile Payments will not take off. Given that most Payment Processors still think “e-commerce” is the future (scary I know), that could take a while.