Mobile payments are the egg – or is that the chicken? Wait, which came first again?
My name is Rob Woodbridge and this is The Take, Episode #13
Riddle me this batman, how many of you have made a mobile transaction this month? Ever? Lots I hope. How many of you have paid with cash? Credit cards? Debit? More I’d assume. You see, more of us use alternative payments to mobile but why aren’t we measuring that? Do you know how much the “cash” payments industry will be in 2017? What about the “debit” payments industry? How come I know that mobile payments will be $17B by 2017? Why the focus on mobile payments as an industry? Aren’t they, just, well, payments?
My biggest issue with the concept of today’s “Mobile payments” is that the stuff being mentioned in the press and praised in the media is NOT innovation. It is not revolutionary. In fact, it is just straight up evolution and in today’s insane world, evolution is boring. Investors have poured so much cash into the payment part of the experience to date – well as least it seems like so much cash until you consider the amount the big 3 have put into it over the last 6 decades.
But now it seems the investment industry is waking up to the fact that today’s version of mobile payments are just a gateway to credit card payments on a traditional network with the traditional players. This is a commodity business with very little upside unless there comes tremendous reach and use. Here’s the chicken and egg factor in building this type of business. To do this well, you need users, you need merchants and you need them all over the freaking world.
Now take bitcoin – they are a non-traditional currency that is starting to be accepted around the world, has name recognition and is starting to creep into mainstream and occupy a small amount of brainspace of the average consumer. This is mobile payment revolution. If you are going to start up something, why not make it something that has a chance?
Today’s mobile payments companies are struggling as it dawns on them that payments are a commodity business and commodity businesses don’t make a lot of money unless they have scale. And when I say scale, I don’t mean the amount of money they have raised or press they have garnered – those are false metrics. Most of these mobile payments companies will end up fodder for the big guys who want to get into their market. Success I guess – for the founders and investors – but not really the outcome worthy of so much media attention.
My name is Rob Woodbridge and this has been The Take.