We asked bloggers around the Internet to tell us what they think it will take for mobile payments (the ability to pay for an item using your cell phone only) to gain traction. Our first post comes from Scott Loftesness. To read more Scott check out his blog or PaymentNews:
The first big challenge for mobile payments at POS is upgrading the POS acceptance infrastructure (e.g., POS terminals, ECRs, etc.) to be able to "talk" to NFC-equipped handsets. From a business case point of view, why would a merchant want to spend money for that upgrade? The customer is highly likely to still have a payment card in their pocket - so the purchase can still happen without upgrading the POS.
In addition to the POS infrastructure upgrade challenge, there's the handset challenge - how to you get payment card data securely onto the handset? Visa's Mobile Platform effort is trying to set standards in that regard - enabling "over the air" provisioning of payment card data from the card issuer to their customer's mobile handset.
Finally, there's the issue of the mobile operator's desire to participate in the transaction economics of mobile payments. Those economics are much "thinner" than what mobile operators are used to with commerce such as ring tones, etc. As a result, there's really not much to share - and the card companies are loath to cut anyone else in on those economics.
Mobile banking is a very different opportunity - and is happening now. There's no POS infrastructure issue with mobile banking - and for browser or SMS-based mobile banking there's no requirement to cut the mobile operator in on the economics. Most major US banks will have launched their mobile banking services in 2008.
"and for browser or SMS-based mobile banking there's no requirement to cut the mobile operator in on the economics." What about installed software clients (native or java)? By their absence are you implying that using these requires the operators' cooperation?