Last week I attended the first Marketforce Future of Mobile Payments Conference in London. Mobile payments, and payments in general, are an interesting sector for scenario planners and futurists at the moment because of the high levels of uncertainty surrounding it. New consumer and industry technologies, a rapidly shifting retail landscape and evolving social attitudes are combining to create a market that is ripe for disruptive innovation.
My five big takeaways from the presentations and discussions on the day are as follows:
- Is there a real need for mobile payments? To what extent do consumers (especially in more developed markets) really want or need mobile payments and wallet services? The general sentiment is that the sector is currently being driven by the industry, but without a compelling consumer story. Models like M-Pesa in Kenya have been successful, but in the context of a large unbanked population in Kenya,poor infrastructure, huge geographies and limited fixed line provision
- Can companies cooperate? Mobile payments, and even more so mobile wallet services, will require a huge amount of cooperation between companies, and across sectors, to do well. History suggests that good examples of effective collaboration, even within these sectors, are hard to find.
- What role should payments play? ‘Payments’ need to be considered in the wider context of the entire customer journey and experience. Payments on their own are unlikely to change how people use their mobiles, but can play an important role in conjunction with other services. A good example is the Hailo cab app which delivers seamless, automated payment alongside its primary benefit of enabling people to order a cab to their current location with just two clicks of a smartphone
- Betting short or betting long? New devices and services like the Square card reader that, when plugged into a phone, enables individuals to take payments from anyone else with a card, are likely to be significant in the short to mid-term, but are expected to be superseded by NFC and mobile payments in the long run. Technologies like Square play an important role in raising consumer awareness, and generating trials of alternative payment mechanisms. And they can also evolve. PayPal started life to let people exchange payments between Palm Pilots.
- How to maximise the potential of NFC? In terms of its application of NFC (near field communication) to location based offers and coupons, the industry has lessons to learn from the history of comparable promotional mechanisms. Over-enthusiasm around direct mail, and more recently email offers, created a deluge of information that consumers turned away from. ‘Mobile offer anarchy’, in which people are bombarded with the prospect of discounted coffees every time they set foot outside their houses could repeat this history. Futures Company research indicates that a ‘pull’ rather than ‘push’ approach to NFC marketing will likely prove more successful.