You know that big search giant? Google, that’s the one. Their Mobile phone operating system Android is doing pretty well.  I happen to think their next big thing is payments.  Want to know why?  Read on…

Since Google announced their Google Wallet, mobile payments went mainstream.  You as a customer probably think, why do I need my credit card on my phone, I’ve got a card in my pocket right?

I have a lot of sympathy with that view.  If you want to pay your credit and debit cards work pretty well.  You know where you stand with a bit of plastic. Check out the video above for a quick demonstration of what Google propose replaces your plastic

Why put payments on your phone?

Because it’s just downright handy that’s why.  It fits into your pocket better than a wallet stuffed with everything and you’re more likely to have your phone with you, even when you don’t have your wallet.  You already prefer your phone to your wallet, payments are just catching up with you.

That’s nice, but why do banks care?

Whenever banks care about something, it raises an eyebrow.  They’re not known as an altruistic bunch.  The banks care about keeping you as a customer.  You are valuable to them in that sense.  With Mobile Network Operators, Visa and now Technology companies launching a wallet, the threat of losing you looms over the horizon.

Banks may not make much money from being involved in wallets, in some cases they actually lose a little money because the fee’s they make are a bit less on contactless or mobile payment transactions

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The business case for banks

The problem is until it makes money, banks won’t run towards mobile payments.  As much pressure as they’re under to improve customer service now that tax payers are a major investor the pressure to survive and not go under is greater.  So banks have to figure out how to make money out of Mobile Payments.  The Math goes a little something like this.

Cost Reduction

• Customers who have more than one card – reduced – less plastic cost
• Cards never need replacing – less plastic cost (as adoption grows)
• Drive customers to self serve on mobile – less branch / contact centre cost

Opportunities

• Coupons / deals using mobile device – unknown benefit
• Context sensitive advertisements (buy it now) – unknown benefit
• Value added services such as Personal Finance Management

It’s clear adoption is going to be crucial to getting any benefit from Mobile Payments.  Without regulation or a mandate from Visa / Mastercard this could get messy.  The opportunities require banks to provide you with offers for things you are likely to buy and use their card to buy with.  Look for offers in your mobile wallet to become common place towards the end of the decade.

The long road to adoption

When it comes to adoption, the Merchants are crucial. From Tesco and Walmart right down to Papa Joe’s little ice cream place.  In the next 5 years, the big names where you do your weekly shop, will change the devices you use at their checkout.  When this happens, there is a good chance they will put a contactless device there.

The temptation to merge their mobile marketing and payments capability will lead to increased adoption.

What happens next

One thing is for sure; Google will seed the market at a loss, and make money from the advertising. That will be tough and near impossible for anyone to compete with, without closing them out through regulation or lawsuits.

Your data will be the price of all these free new services.  So don’t worry about new charges.

• What are your thoughts about how Mobile will play out?
• Will banks invest to work with Mobile Payments?
• Who will win the Mobile Payment race?

It is said that the internet will kill the in store retail experience. Do you think this could change talking with someone in your bank about a new loan products?  How about trying out new kitchen designs before buying?

• How would you use this surface?
• Do you think business will embrace it?
• Would your company use it?
• Could this revitalise the bricks and motar experience

Was reading at Econsultancy that Carrier Billing could become key to the Android Market place success.  Is carrier billing going to become more of a standard?

There are many emerging payment methods and trends that could well catch on.  Carrier billing for SMS has been a neat niche growth market for some services, and would probably extend quite well into apps.

If you look at the SMS services, like Jamster downloads, or game purchases.  Carrier billing was a profitable endeavour because of its low friction nature.  All you have to do is send a very quick SMS, and you’re done.

Things get more difficult when dealing with commerce, services or subscriptions.  What if I buy something using my Ebay app and want to pay using PayPal?  How does carrier billing work then?

In Application billing

In app billing services like Bango provide a compelling option for developers because the model like Zong or Boku offers a standardised interface for billing against your carrier.

I for one, am not a fan of carrier billing.  It’s VERY bad for the consumer, and puts more power in the hands of the carriers, that needs to be de-centralised.  I have no doubt it will play a role in the coming years, as Apps replace SMS as the preferred mode of two way consumer interaction.

What happened to the virtual wallet?

Android marketplace could end up with very fragmented payment options, on a per carrier basis.  I look at what facebook are doing with facebook credits and virtual currencies as a way out of the millions of ways to pay mess at the checkout.  For the third world, and emerging economies, carrier billing services like Zong, or prepaid options like m-pesa or Obopay provide compelling abstractions…

The key will be, who can make paying for content consistent across the TV, Mobile, Tablet, PC and Point of Sale? To achieve that you need to separate the funding source from the payment method.  The schemes, Visa and Mastercard are not proactive in this space & even PayPal are dragging their feet.  This is an area to watch!

For me “one bill to rule them all” isn’t a fun idea.  I want financial control over who gets paid what, and when… and for that I need to be able to manage payments, and subscriptions via a financial institution or stored value account.  The PayPal wallet concept is right, it’s just not nearly as well commercially integrated to the emerging marketplace as it needs to be!

• How big do you think carrier billing will become?
• Will it become standard?
• What alternatives are there?
• Is there a role for a business to play the abstraction / Payment Service Provider role between carriers, banks and app stores?

Imagine if the examples towards the end of this video were implemented in your business…

Balance has always been my biggest issue. As someone who has never done a full forward roll (I always slope off to one side)…

The key appears to be moving from being a passenger in the entrepreneurial cycle to the driver. What could I commit to?… and importantly: How do I ensure I stick to that commitment? Not for a week, not for a few days… but really stick to it?

Read a great book called the 60 second motivator. It suggests something you are procrastinating is due to one of three things.

1) Importance
2) Confidence
3) Knowledge.

It has to pass those three gates to get done. If it’s not important to you, how do you reframe it, give it some context & make it important? If you don’t have the confidence, it doesn’t matter how important something is, you will retreat into your cave. Confidence is an elusive elixir, but one that is drastically improved via action and little victories. Break it up into really small tasks, and take action. Which leads to Knowledge. How do you break something into tasks? If you really don’t know this is where you need your network. Knowledge wants to be free. Start at Google & work towards the answer.

Knowing the path & walking it are two very different things.

Reading Scott Gould’s post on preaching to the converted got me thinking.  Do you need more knowledge, or more action?

A few ideas for you to turn community into connections.

• Schedule a skype call and get talking about your passions.
• Agree to work together on a small project
• Go out of your way to refer or make an opportunity for them
• Do something extraordinarily special for them
• Meet them

How about you? Are you preaching to the converted?

It’s impossible to under state the power of picking the phone up and demonstrating genuine passion and enthusiasm.  Dial the numbers and press the green button, then let me know how you get on.

….

Needed to get something up, just to try and articulate the exhaustion that comes from a weekend to write home about.

Vodafone sent me free VIP tickets (which was awfully nice).  This means we beat the traffic, and had a very short walk to the car park.  Setting up was super quick, pop up tents are the way forward & I’d packed light.  Two pairs of jeans, two tshirts, a fistfull of  underwear & 3 litres of vodka (pre-funnelled into a plastic bottle of course).

If you ever get the chance to go, I highly recommend it.  The Guest bar leads right out by the main stage in the area.  It’s good to be able to get served quickly, but I did miss the atmosphere of the main campsite.

The Bands – Friday

So the lineup this year was quite mixed.  The first band I went to see was Crystal Castles who came highly recommended.  Had never heard of them before, but this was a fun, trippy live show.  Will definitely be downloading.  Their lead singer looks like a film noir anime character.  The music makes absolutely no sense, but sounds good.

Enter Shikari had a pretty intense crowd, so I bailed and found a hill.  It sounded quite good though.  Friday was all about Bad Religion.  30 years of an incredible bad, to be experienced in one night.  Amazing how hard a band can rock.  Quite an intimate but passionate crowd, singing along to “Sorrow” to cap off a fairly relaxed Friday.

The good stuff was still to come.  Including how I ended up throwing chewee bars into a fire, getting lost in an army of people fencing using tree branches (with leaves) & the rest of the bands.  Watch this space for more… when the headache has subsided!