Oranges and Apples - The Future Mobile Payment Giants?
In previous articles we’ve talked about a virtual arms race amongst industry participants. Their aim is to ensure they’re not left out of the next generation of payments innovation like they were with the successful M-Pesa.
At a scheme level, Visa invested in Cybersource and MasterCard bought Datacash. Visa continues to invest in Square while MasterCard seems to be backing iZettle. And with over 5 billion mobile phones globally, it isn’t any wonder that these global players are trying to align themselves with future growth in mobile commerce and NFC.
Do we even need Visa or MasterCard? M-Pesa doesn’t seem to think so. And Google Wallet may try to remove them from the equation too.
Will the telcos, such as Orange, be the new payment schemes, directly debiting payments from customer’s bank accounts? We saw Pay By Touch try this route (and fail) as well as early adopters work in the mobile payments space such as SimPay (failed in 2005).
Will Visa and MasterCard take a small piece of every pie to ensure that they cover the future?
Or, is Apple showing an example of where a retailer can potentially get around Visa and MasterCard as well as placing traditional payment solutions into their stores? Their recent rollout of their EPOS-like EasyPay system to iPhone users shows where the future may be heading; a customer buys an item online or in the store (using the camera on their iPhone) and then uses their iTunes account to pay and walk out with the goods. No card, no payment terminal and (potentially) no need for Visa or MasterCard. Disintermediation of all of the traditional players by a forward-thinking retailer prepared to do things differently.
The Orange route is one approach, while Apple demonstrates another way forward. But the future is likely to be a hybrid of a lot of technologies ultimately providing what customers want (a great experience) rather than what technology providers think they need (another technology).