Integration the Real Barrier to Mobile Payment - Part 2
We have explored at a high level how a mobile payments system is a significantly more complex proposition than a standard card payments system. Why is this so?
In simple terms it is because the token which drives the payment (smart phone vs smart card) is substantially more intelligent and flexible. The whole point of mobile payments is to make the process more convenient for the user. This should lead to more purchases and further drive the migration to cashless payment.
Therefore mobile payment systems will potentially have to offer the following characteristics; the ability to enter account details by NFC, the ability to input vouchers via 2D bar codes, the ability to send receipts via SMS, the ability to input account details or verify PIN by an app either over the network or via Bluetooth and many variations on these themes.
Numerous questions arise from these possibilities; how do we ensure interoperability between NFC devices and these systems?; how do we accomodate the huge number of networks providing mobile telecomm services?; how do we authenticate apps as trusted?; won't bar codes have to be self-scanned?; and many, many more.
In truth, some of these questions could be addressed by simply integrating a new piece of technology to the system. But others are far-reaching and have potentially huge implications for interoperability.
Further, in the early stages at least, mobile payments will be niche and may not offer the return on investment to drive the necessary systems development for general deployment.
It is more likely that retailer specific or closed-loop systems will be developed where the application and system can be more easily scoped and the business case quantified. Such a landscape will potentially lead to a number of retailer owned mobile payment apps, any of which could evolve into a defacto system for other retailers who wish to join the revolution.
And one doesn't have to look too far to find retailers already making inroads into the financial services sector.