More Activity Around Mobile Payments

Ed Kountz | June 24, 2008, 09:11 AM

More developments of note in the arena of mobile payments.

--MasterCard has partnered with Obopay, Inc. to offer a fully integrated on-demand person-to-person mobile payment service to United States consumers. The service, offered via MasterCard MoneySend, will give new and existing MasterCard issuing customers the ability to provide an innovative mobile payments service to their MasterCard cardholders on all credit, debit and prepaid MasterCard branded products. The service is similar in structure to, but separate from, the operation which Citi has been working on with Obopay since late 2007, and will use text messages to conduct payments across any MasterCard branded card (credit, debit and prepaid).

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-- Mobile Money Ventures LLC (MMV), a joint venture of Citi and SK Telecom, has just announced that its mobile financial services solution is compatible with Android (the Google/ Open Handset Alliance-developed open software and applications stack for mobile devices. The firms indicated that the offering help financial institutions and carriers offer customers a comprehensive set of mobile financial services applications on Android-powered mobile devices.

The goals of the service, are enhanced customer loyalty and a fuller customer experience, and MMV’s applications will enable customers to pay, track and manage financial transactions, with an embedded rewards management function for wireless users. Other features include receipt tracking and expense management, a variety of payment functions and brokerage / stock tracking services, among others.

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--In a recent conversation, the head of First Data Corp.'s Mobile Commerce Solutions unit indicated that FDC intends to use its GoTag contactless NFC antenna-equipped stickers as a tool to jump-start use of contactless payments. While NFC handset availability is a hurdle in the deployment of mobile proximity payments, GoTag (using an NFC antenna backed with adhesive, which can be attached to a user’s device) would help to overcome this issue, allowing consumers to quickly turn any mobile device into an NFC handset(albeit without the integration promised, in terms of device access to web sites or other internal content, called up via a device with an integrated, internal NFC chip).

As mentioned in my recent report on the topic, the level of activity around mobile payments has increased significantly in the last 18 months. While this activity has been global in nature – Kenya’s mPesa service being just one example—this activity has been extremely visible in (and emanated, in significant part, from) the U.S. as well.

I was recently asked if all of this mobile payments activity isn’t another climb up a mountain of hype. I explained that, given the fundamental market shifts that we’re seeing, I don’t believe it is. Still, that doesn’t mean automatic success. Expect a multi-year journey before you see U.S. consumers turning in significant numbers to pay-by-mobile solutions.

Given the history of U.S. mobile and financial service technology innovation, this isn’t a surprise. Yet institutions and others must keep in mind that the promise of these developments has yet to be matched, in the U.S., by strong consumer demand for mobile payments services. Yes, mobile banking is emerging as a bright spot. But the habit shift involved is substantial…and the vast majority of these technologies will take several years to truly have an impact, at least for those which make it thru to consumers as must- have innovations. Education will make all the difference...and while consumers' payment habits do shift, they shift for a reason (generally, the perceived delivery of tangible value). This is true for mobile as well as debit or any other product, and will be a fundamental benchmark of success.