Posts by Ed Kountz from April 30, 2008

Ed Kountz | April 30, 2008, 10:04 AM
The return of US mobile payments...different this time around?

Welcome to JupiterResearch’s online home for insights and analysis of the consumer payments space. Check back with this space regularly over the coming weeks and months, and I look forward to your comments and feedback as my blog evolves.

It seems fitting to begin with a few updates from an area of perennial interest and, at least in the U.S., modest developments—mobile payments. Those of you with whom I’ve spoken in recent weeks know that JupiterResearch’s official position on the short-term potential for U.S. mobile payments is cautious. We see the value and changes, but also see the required habit shift and remaining obstacles. Many of you saw my recent report on remaining challenges for mobile proximity leveraging Near-Field (NFC), including ecosystem, business model and handset availability issues.

And upcoming research will delve into the topic in greater detail…so stay tuned.

That said, recent weeks have seen a number of US-centric announcements on the topic. These include:

--Sprint Nextel launching a downloadable mobile wallet on 18 devices from LG, Sanyo, Motorola and Samsung, called MyMoneyManager, powered by PayPal;
--Citibank and Obopay, announcing in April that Citi would be trialling Obopay’s mobile P2P payments service with US checking account holders. Obopay subsequently closed fourth-round funding, and more recently announced that Indian telecom Essar has taken a strategic stake in the firm
--Prepaid MVNO Trumpet Mobile, which (powered by Affinity Mobile’s MADE service) announced device availability at the nation’s Radio Shack stores and a deal around international remittances with Western Union. Affinity Mobile also announced a partnership with mobile banking provider mFoundry targeting underbanked consumers worldwide
--Amazon.com’s rollout of TextbuyIt, an SMS –based product comparison and purchasing service designed to give Amazon a mobile application consumers can use as an in-store shopping comparison device
--And several others

Certainly, the drivers for mobile payments are stronger than ever … even in the US. Yet the inhibitors are also significant, not least of which are a variety of other payments options and a lack of consumer interest, as measured by JR survey data. Not least of which, supply-driven expansion of contactless payments has successfully seeded the market with contactless cards, but the recent AmEx decision to end its payments fob indicating that the vision of any-token payments requires heavy marketing support and education, particularly to overcome the cost issues associated with small-batch deployments. But the deals outlined above indicate that the bloom is truly back on the rose for mobile device-based transactions, and that (in spite of modest consumer interest) the space bears watching.

If you’re planning to attend CTST May 12-15 in Orlando, I look forward to connecting with you there. I’ll be on the analyst panel on contactless and mobile technologies, moderated by First Data, on the afternoon of May 13th. Hope to see you there.