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TMCNet:  Mobile payments? 'For the consumer, this is doing their head in…'

[November 21, 2012]

Mobile payments? 'For the consumer, this is doing their head in…'

(Guardian Web Via Acquire Media NewsEdge) Some analysts pump hot air into the hype around unproven new mobile technologies. Thankfully, Eden Zoller is one of the other ones.

The principal analyst at Ovum's telecoms consumer practice delivered a dose of common-sense regarding mobile payments at this week's Guardian Mobile Business Summit conference.

"There's a new launch every week, which is exciting, but we're literally in danger of leaving the consumer behind," she said during a panel session on mobile payments. "Mobile payments are pretty much off-the-radar for most consumers, or usage is very low and it's not habitual." Ovum recently surveyed more than 11,000 people in 11 countries, asking them whether they use apps – around 7,000 said yes – and if so, what their three most frequently-used apps are.


"3% of those 7,000 surveyed ranked mobile banking as one of their most popular apps. Things like shopping, price comparisons and auctions scored 1%, and mobile wallets was actually under 1%," said Zoller, who noted that the mobile industry has a lot more work to do on making these technologies popular.

"We need to tell people about this stuff, make them aware that it's actually there, and convince them that it's more convenient, it's easier, and that it gives value compared to the existing payment mechanisms that they have. We need to do all this, we're not doing it very well, and instead we're just confusing them… For the consumer, this is doing their head in." There are dozens of companies pushing mobile payments technology in various forms in 2012, trying to simultaneously win over mobile operators, banks and credit card issuers and retailers, let alone the normal people who might use this technology at some point.

Also on the panel was Tony Moretta, director of Weve, which is a joint venture created by British mobile operators Everything Everywhere, O2 and Vodafone, which wants to create a set of technologies and standards for mobile payments and marketing for banks, retailers and advertisers to work with.

Even he didn't mince his words about the current situation. "There's a proliferation of products, services and launches, or rather a proliferation of announcements, because there are very few products that consumers can take and use today," said Moretta.

"Even when they work, they don't replicate what consumers want to do. It doesn't really matter what you come up with as the technology: you have to convince consumers that it's easy to use, secure and it's going to be accepted everywhere." Judging by the mood in the conference room, there is plenty of industry scepticism about the operators' ability to move fast enough to make a big difference in this regard, although Moretta pointed out that Weve's status as an independent joint venture should help it avoid getting bogged down.

"Separately, we're not quick, but [the operators said] 'actually we're going to put that exclusivity around certain areas and give the responsibility for developing the technology to a joint venture that will be more fleet of foot," he said.

'You've got to have simplicity...' The challenge with a 45-minute session on "mobile payments" is that the term covers a huge range of different technologies and services, from mobile wallets through to retailers taking card payments through mobile devices, through to location-based vouchers and coupons on smartphones. Any of which could generate a day's worth of conference sessions on its own.

So, Stewart Roberts, UK managing director of mobile card-payments firm iZettle – often compared to Square in the US – talked about his company's work convincing retailers to "make the journey a bit easier" for their customers as they move from traditional card or cash payments to something more mobile.

"Ease of use is critical in this," he said. "You've got to have simplicity. If it's difficult, [people think] 'I'll do it the old way'." Meanwhile, Foursquare's business development director Omid Ashtari talked about his company's partnership with American Express to offer special deals to people checking in to specific locations or businesses – for example, people checking in to a Tesco outlet and spending more than £5 could get £5 back on their Amex card.

"We're taking people and driving them to merchants and businesses that might be useful for them," said Ashtari. "There's an opportunity to tie in coupons and specials, but also to tie payments into it. But it's important for us to adopt the mechanism that is as mainstream as possible." One question that cuts across most of these areas is how Apple, Google and possibly Amazon will fit into and/or disrupt the mobile payments market as it grows.

By September 2012, Apple had 435m registered iTunes accounts, complete with credit card details. In its PassBook app, it also has the beginnings of what looks like a mobile wallet. Meanwhile, Google already has its own digital wallet service, and is encouraging the 1.3m people who activate a new Android device every day to link it to their devices.

Why will these companies co-operate with operators, banks and card issuers rather than going it alone "We spent a lot of time with the European Commission talking about Apple and Google," admitted Moretta. "There's not a lot we can do to stop someone like Apple, but they can stop us by blocking things in the App Store, for example. They're all playing around in this area." However, he suggested that Google has encountered some pushback from banks in the US with its Google Wallet, predicting that Apple may face similar obstacles.

"They do have a wallet in many ways: they've got the credit card details and most people have an iTunes account," he said.

"Translating that into something banks will be happy to use at the point-of-sale is not that easy. There are quite a lot of obstacles for Apple… They do have the scale and control of the ecosystem, and they can put up barriers for other people. Our hope is they don't do that." The tone of this article – which reflects the conversation in the panel session – is quite downbeat. That may be a good thing, though.

There's still a lot of hype around mobile payments, but it's good to see people from that section of the mobile industry being realistic about the challenges this technology faces, particularly the needs and expectations of its potential users.

Whether they're being as realistic about the likelihood of Apple and Google playing ball with the plans and development cycles of operators and banks is another question entirely.

(c) 2012 Guardian Newspapers Limited.

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