MWC 2012 - M-Commerce: better than a cash filled wallet?
To achieve mass market penetration of mobile payments, the industry needs to produce something that’s more useful than one of humankind’s most sophisticated and personalised tools: the cash, card and memento filled wallet.
This is the view of Michael Abbott, the CEO of ISIS, the US operators’ joint payments venture - and his view is that so far, the industry simply hasn’t done it well enough, although it now appears to be recognising the scale of the challenge and the value of success. He said that to be successful, M-Commerce would have to be available to pretty much everyone, have fair pricing, be totally secure and private, work simply, and work everywhere. Not much to ask then…
Michael also shared research that showed that while only 15% of consumers ‘wanted an M-Wallet’, 70% wanted a safe way to manage their money and information. It seems from this that it is critical to focus on the benefits and not the product in the process of educating and recruiting customers to M-Commerce.
One seemingly paradoxical thing that we hear time and time again from M-Commerce pros is ‘there’s really not much money in it’. This can seem all the more surprising when seen in context of how much money there is flowing through the world economy, as shown in the following chart from Don Callahan’s presentation (he’s the COO of Citigroup).
However, Don also said that ‘the information about money today is as important as money itself’, which is another theme we see repeated around the M-Commerce industry (see e.g. M-Commerce 2.0: Report and analysis from our last London Brainstorm).
Other interesting stats he shared were that while there are 5bn mobile phones in the world, there are only 1.8bn bank accounts, and that only 15% of transactions were electronic, with 85% being in cash. So, in theory at least, with the majority of customers and the majority of transactions being unbanked and in cash, there is a vast untapped opportunity - although the practicalities of achieving that opportunity are extremely challenging.
Finally, Don shared findings from the KPMG’s research that showed the relative standings of different industry players against different roles in M-Commerce. These showed that banks and credit cards came top, with telcos close behind in third place - which is at least some good news for telcos, though the tech and specialist companies are not far behind.