9 Jul 2012

Mobile Payments - More than just replacing payment cards...

It was a full house for Mobile Payments chaired by David Birch of Consult Hyperion and produced in association with ICT KTN (http://www.ictktn.org.uk) on 2nd July.  

Our panellists were: 
* Nathan Cushnie  - O2 Money, Head of Product Strategy & Development, mCommerce, Telefonica UK)
* Russell Sheffield - Innovations Director, Paythru
* Jennifer Payne - Marketing Manager, Ponti's Group Ltd
* Iain Herd - OEM & Platform Partnership Lead - Global Business Development at PayPal Mobile

David opened by talking about our need to have a narrative about what the future will be – if we can agree the future vision, then we can work backwards to create it. You can read his full opening here: http://www.chyp.com/media/blog-entry/story-time.  

So it became a night of questions, examples, experiences and wish lists:

The Questions
* Is it about the “Cashless Society” – a concept first referenced in the 1880s – will we ever be totally cashless?  Some people will always want to deal in cash.
* Are we solving a problem that doesn’t exist – credit cards are ubiquitous – so where is the ROI for retail to comply?
* For retail, doesn’t it need to be more about marketing, creating relationships with customers with some smattering of “social”? Retailers need a simple solution to be handed to them or they won’t bother.  As Ben from Masabi said - retailers are nervous of getting it wrong and really need one system that supports different types of payment.
* Are retail payments just as a utility a bit boring? Do they need to be consolidated with other financial things?
* What form will mobile payments take?  Is one mobile payment platform enough?
* How will people behave – will they have fewer or more banking relationships?
* Are we just waiting to clear the logjams before Apple tells us what to do?
* Surely, our narrative needs to look bigger than just replicating credit cards and buying a coffee?
* Is it really just a squabble about who owns the customer?
* What about risk? Are mobile payments more, or less secure?  If they are more secure, they should be cheaper to process – perhaps we should be rewarded for making a mobile payment?

Worldwide Cases
* Japan – research has shown 1/3 of users with the capability on their phone have used mobile payments in convenience stores (73%), vending machines (48%), transit (37%), fast food 34%. These electronic money systems are all prepaid and 51% of people load them from payment cards, while 39% load them in-store by handing over cash.
* US - research showed that only 15% of the customers said it was somewhat or very important to them to be able to pay with their smartphones – note that hardly anyone in the US has ever used mobile payment in a shop
* Turkey have 10-12 merchant accounts for each merchant — they choose which to use – note that in Turkey, terminals are provided by the banks for free so this is possible
* Kenya is a good user case, but not comparable to the UK.
* South Africa – banks and mobile operators have been working together for the past 15 years

Audience Experiences of purchasing on a phone
* SMS used to buy a local currency (Brixton pounds) – the context was of a strong community narrative of building sustainable local communities.  This was considered a big motivator with supporters happily using mobile as the fulfilment route. Some argued that this would be a key driver for adoption.
* Retail examples used included Starbucks app, NFC on iPhone at Starbucks, Pizza Express payment app that allows users to book a table and pay their bill and were all considered to be easy to use.
* Examples of where poor service and check out queues have resulted in using Amazon to buy direct – however, this example was fulfilled via website on PC and was also about “showrooming” a new term for price comparison via mobile whilst in a store.
* Do we even need to get our phone out of our pocket? Is it better just to walk around and have things credited to our account automatically?  Paypal talked about a system where the POS terminal knows you have walked in to the store and you can pay by walking up to the till and talking – obvious loyalty schemes are built in.
* PayPal Here and Square were also mentioned as offering innovative mobile payment solutions for both end consumers and merchants.

Wish Lists
* Can we have payments that automatically go through to my expenses account?  Many accounts departments won’t accept electronic receipts at the moment.
* Can the systems help me budget and track my spend?
* Can mobile payments be identifiable on my bank statements?
* Risk - mobile payments should be more secure, and therefore cheaper?
* Why can’t I take the phone round a supermarket, scan as I go and then pay by mobile? (02 wallet does include a bar-code scanner)
* German stores are asking for QR Codes in window displays so that people can still make purchases on a Sunday, when stores are closed.
* When will Facebook do it?
* I want the right to make an anonymous payment

In conclusion – something about the narrative has to take in a bigger story – one of the reasons why it is hard to come up with the story is that we are thinking about how can I take my card and stick it in my phone. There are other bigger social changes at work for example, around community that we should look to.

Thanks again to partner ICT KTN, our panellists and to David Birch for a lively debate.

You may also like to check out Adam Cohen-Rose’s blog: http://blog.cohen-rose.org/2012/07/momolondon-mobile-payments.html