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Mobile Payments – the Next Billion Dollar Market???

Russell Buckley has a huge post talking about success in mobile payments, asking for feedback.

Here goes (in relation to Russell’s headlines):

1. and 2. Usability

I am actually one of the inventors of a patented mobile payments protocol, which tried to make mPayment interoperable between all participating operators. It also tried to be able to use multiple payment methods (credit vard, phone bill, direct debit) and had to be usable in retail, on the web and in WAP. You can imagine what this meant for usability…

For retail payments, you really want RFID or something similar in the phone to make it as painless as possible. I can’t even begin to tell you how many stupid ideas I had to fight against: bluetooth (how many bluetooth and payment enabled phones are in the queue behind you?), infrared, GPRS (not enabled, not configured, no coverage).

My favourite idea: use something like Semacode that you put into ads on magazines or billboards, or even in shops or web pages. Provide an app that will hunt down the article at the cheapest retailer (or one local to you, alteratively). Click to buy, transfer address details autmatically. The ultimate in user experience.

The ‘old’ paybox system was also great, especially for eBay transaction. SMS instant notification, and easy bank transfers. Unfortunately these transactions didn’t generate money for the operators of the payment scheme, so they were abolished (or killed by adding a yearly fee). This was exactly the kind of thing that attracted enough people to sign up, unfortunately…

3. Training

Agreed. In order to be able to do this, mobile payments will need to resemble card based payments as much as possible (in terms of process) – you will need to have a receipt, be able to cancel or refund payments, amongst other things.

4. Simultaneousness

Acquiring merchants is actually quite hard, as they are very cost sensitive. This can only be successful if you already ‘own’ the merchants, i.e. as First Data Corporation currently tries to do it with their new mobile division.

Acquiring the customers is actually a lot harder – you can watch the example of paybox, that failed by not getting into the operators. The operators themselfes will only succeed if they can offer additional value. People are already quite well catered for by the credit card industry, so you’ll have to convince them to sign up. Not easy at all.

5. Point of sale

Wouldn’t it be even better if the “mPayment” sticker would allow you to ‘really’ pay with all the other ones in the background?

6. Low cost

That goes without saying, but in both directions: must be cheaper for buyers *and* merchants – might be ideal for digital goods.

I have been waiting for mPayments for quite a while – with all the billions you’re mentioning it should have been out there for quite a while already…

UPDATE: by the time I was finished, Irakli also had his comments ready.

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