“Mobile payments is like waiting for Godot,” said Omar Javaid, managing director of BBO Global, speaking at a recent What’s Hot (and What’s Not) in Mobility 2012 forum in Mountain View. “Every year is the year of NFC but it never happens.” The problem, he says, is that processing payments is a system play. It’s a space that’s controlled by a few big players and they’re not very interested.
Quinn Li, managing director of Qualcomm Ventures, agreed. He made the point everyone is trying to get a piece of the mobile payment value chain, but in order to it you first need to get everyone else in the chain to agree and then you need to handle a lot of transactions quickly. “Payments is a pennies business and you need scale,” he said.
But even if start ups find it difficult to take a penny or two, the fact that the transaction is happening at all creates an opening. Scott Raney, a partner at Redpoint Ventures, said he’s encouraging entrepreneurs to find ways to add value to mobile transactions rather than trying to handle the payments.
Creating loyalty programs on mobile devices is one example. Consumers will still carry around a few credit cards, but they won’t put up with the clutter of cards and keychain tags for every store in the mall. Javaid pointed to Apple’s Passbook iOS app as proof of concept, saying he wouldn’t use it as a substitute for his Amex card but it’s handy for Walgreens or Starbucks plastic.
It’s an end run opportunity: mobile apps, or even devices, become integral to transactions, but outside of the secure boundaries guarded by banks, credit card processors and the other behemoths of the financial world.
The What’s Hot (and What’s Not) forum is an annual event organized by the Wireless Communications Alliance. This year’s event took place on 14 November 2012 at the Fenwick & West law offices.