Co-operation key to win mobile payments game

Co-operation key to win mobile payments game

Operators are unlikely to succeed alone in the ‘high stakes’ game of mobile payments, with collaboration with banks seen as the best way to make them catch on, a conference has heard.

After years of false starts, 2013 has been predicted to be the year when mobile payments become commonly used in the UK. However, a Westminster eForum event about the future of digital payments last week (14 February) was told despite the rise in NFC enabled handsets – comprising 17% of smartphones today and predicted to hit 71% by 2017 – there were still considerable barriers to entry.

Linda Lennard, from consultancy George and Lennard Associates, said consumers were concerned about which company they would approach if problems arise – the handset manufacturer, operator or bank. She said a common view was one of scepticism about both the banking and telecoms industries. She said: ‘There’s a huge problem with trust from the consumer point of view that the industries need to address.’

In spite of this, Mark Hale, head of payments at KPMG, said consumers were keen on using their mobiles to pay but added: ‘There is a frustration about the plethora of
different technology and standards in place from different companies.’

While Orange launched its Quick Tap payments service in 2011 and O2 made its wallet live last year, Richard Johnson, strategy director at Monitise, said every company had an opportunity to make its mark with mobile payments. He said: ‘The stakes are incredibly high for all of those industries involved. There will be big winners and big losers but the outcome is not pre-ordained.’

However, he added he felt operators working with financial companies rather than going alone was the best way for the services to gain traction. He said: ‘The mobile operators have a huge array of assets, whether it’s direct contact with consumers or their expert use of data. The opportunity is definitely there for them to really grow their role and be part of a successful evolution. But the challenge is to make that work. When you look at the various telecoms models for mobile payments, they haven’t been a storming success.’

Marc O’Brien, Visa UK MD, agreed, reiterating its previous announcement that it is planning a mainstream push of its V.Me mobile wallet this year, along with a new product for Vodafone. He said: ‘Operators have had a clear core business for many years around data carrying, masts, quality of coverage etc. We have had a core business of approving financial transactions. MNOs have made several attempts during the past decade of financial products.

‘What’s important for the future is collaboration. Clearly the MNOs have assets that are good to partner with and have better services for consumers. If MNOs could successfully manage risk in the way financial institutions do, they would be better placed but that’s incredibly hard.’


Author: Graeme Neill

Written by Mobile Today
Mobile Today


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