In this, the concluding part of the Payment Paradigm series, I will try and summarize the various mobile payment schema’s that I mentioned in my past posts. I would like to reiterate that mobile payments presents a significant revenue opportunity to the various participants in this market. And this is incremental revenue – meaning it’s an opportunity to grow top line for many players and if that happens, it will certainly delight a lot of investors and stockholders.
Of the three main paradigms, I think the paradigm that’s led by the Financial Institutions will perhaps have the most difficulty in obtaining broad traction. Carrier led and Payment Networks led payment paradigms have a very good chance of mass adoption. The key is in execution across many fronts. Developing a compelling end to end solution is one thing, but successfully deploying the same across a vast plethora of devices and OS’s, geographies, carriers (and its associated technologies) etc is a totally different ball game. It remains to be seen, which paradigm will take root in the market. Furthermore, will this be a NFC based rollout with an associated app, or will this be integrated into the phone with the app pre-loaded or will this be browser based?
And then there are those solutions that are proving to be viable alternates to the big guys. I expect a lot of consolidation and M&A’s to take place in this space as firms shore up their foundations with key patents, technologies and personnel.
No matter which paradigm succeeds, a very serious concern is security. Vendors will need to address this issue head on and ensure the integrity of critical financial data. There is trouble brewing with Carrier IQ and its location tracking software that’s embedded in most phones, and there is increased scrutiny from regulators, technology mavens of sorts, the media and even consumers. Even a small stumble could cause a lot of damage.
And finally, to ensure consumer adoption (assuming that all the kinks are sorted out) there has to be (and there will be for sure) a series of marketing and sales enablement campaigns. We are seeing a few already, but they are what I call quiet launches that are almost like “product/solution pilots” intended to gauge consumer interest and to test technology. Expect to see a media blitz when things begin to firm up and the game to rent consumer mindshare in this space will begin in earnest.
Ok, I am going to conclude here. I really hope that you enjoyed this series as much as I did. This post is not the end of it as I intend to provide updates time to time. In the meantime, as usual your feedback and comments are always welcome. Stay tuned for more!