I keep hearing people ask why mobile payments haven’t taken off in the U.S. My answer: “They have!” But many of us haven’t realized it yet.
When you use your mobile device to purchase and acquire something, that’s a mobile payment. By that definition, I’d say that everyone who’s ever downloaded an app to their mobile device has already done it, because the act of downloading requires a kind of payment. Even if no money is exchanged, the consumer must still enter their account credentials, just as if the app costs money.
At this point, we all expect the payments for those apps to be handled via our mobile. The notion is embedded in our minds, and our behavior has changed accordingly. We set up an account through iTunes, eBay, or another merchant, and then make purchases through our devices. We already expect this kind of simplicity. Apple’s announcements related to iCloud and not requiring tethering an iPhone to PC, will only further the advance of mobile payments.
Yet still, people are looking to telcos and banks, asking when we’re going to get a mobile payment infrastructure, and forgetting that mobile payments have already taken off via smartphones, and merchants have taken the lead. Telcos and banks are just now beginning to recognize it, hence the push for cloud wallets, NFC payments, enhanced operator billing, etc.
However the key to this stealth progress of mobile payments has been enrolling customers. Apple signed up millions of customers through iTunes, and now they leverage those accounts for selling not only music, but also apps, movies and TV shows. With the innovation that’s come out of Cupertino, CA in the last several years, I won’t be surprised if Apple continues to expand what it sells through iTunes accounts. As new mobile payment systems roll out, they won’t be compared to writing a check or swiping a card. They’ll be compared to the easy, elegant iPhone and Android process. Those mobile payments are so intuitive, that consumers barely realized they were doing something revolutionary.
Now that the mobile payments horse is out of the barn, the important thing to note is that the hardest thing—changing consumer behavior—has already been achieved. However, this is very specific to the North American market. We will continue to see proliferation of telco-sponsored mobile wallets in other parts of the world as competition heats up to enroll those customers.