The Catalyst Code

My post last week Blah, Blah Mobile… Blah, Blah Mobile really prompted a lot of discussion about the topic of mobile payments – and maybe even touched a few raw nerves in the process. I thought I would follow up with a few observations given the discussions that took place last week on and off the blog.

There seems to be little disagreement that mobile payments at the point of sale is a longer term proposition even though we all believe that is ultimately the future of payments. Contactless as an enabling technology, at least here in the US, is a long way from being ubiquitous in spite of what many analysts say. I think we saw that validated last week too when Wachovia decided to basically take a bye on contactless until mobile is the enabling form factor. My point is that the hype re contactless at the point of sale is a long way from the reality, at least here in the US. (As an aside, I just read an article in a recent Mobile Payments news about how contactless is underwhelming UK merchants for essentially some of the same reasons that it is having difficulty generating momentum in the US.)

The more interesting discussion, I think, is the broader issue around mobile commerce, which I think of as a three legged stool – mobile banking, mobile marketing and mobile payments. It is a fair point that contactless is not the only route to mobile payments. There are some interesting applications being created in the mobile marketing arena that may make mobile payments an attractive proposition for consumers. These applications will only grow more viable as web browsers become more user friendly and begin to pull thru demand for shopping and buying via the form factor.

But, here again, the time frame for wide-scale adoption is longer term not because the technology isn’t available to make any of this possible, but because the consumer needs to be convinced that using the mobile to pay for things is better than the status quo. Consumer adoption is key. And getting enough consumers to adopt the next new thing is essential. The payments industry is littered with lots of neat ideas that relied on a value proposition of “neat technology that does lots of cool things” but collapsed because not enough consumers were willing to give it a whirl. Evolution and not revolution might be the way to crack the chicken and egg problem of mobile commerce. Think about it. The payment innovations that have been successful over the years were so because they created an experience for consumers that enabled their shopping experience – it made things better, not just different. The silver bullet for mobile isn’t so much about what is possible using that technology, but how it creates a willingness for consumers to change the behavior that has worked well for them for five decades.