I was at CTIA in San Diego watching a panel on the future of payments and one of the panelists stood up and said something to the effect of “we will all be carrying multiple digital wallets in the future.” It was at that moment it dawned on me how completely disjointed the mobile payments industry is and how far the divide is between what consumers want and mobile wallet providers are offering.
This is a big battle pitting upstarts and incumbents against entrenched human behaviour and a digital divide between the have’s and the have nots – with an incredible kingdom of immeasurable wealth to the victor. It seems as though everyone is focusing on this important space but are they looking at it from the right vantage point?
Run before you can walk
There are few companies that are really attacking the problems that mobile payments should be focused on – enabling consumers to pay for goods and services easily, seamlessly (i.e. without friction) and with any currency they have available to them. Most are focused on the improbably feat of replacing cash and credit cards and I wonder why. The goal here shouldn’t be only to replace an existing payment method with another should it? Wouldn’t it be better to take the dozens of common payment methods, wrap them into a single point of payment, compliment it with a layer of artificial intelligence and move it across all payment interaction opportunities? What the mobile industry has taught us already is that simple is good. Here’s another opportunity to bring some important lessons from mobile into the terrestrial world.
Most humans know what currency is – we exchange it every single day. Coins, dollars, swipes, bartering or exchanges – a value for value transaction is how economies have been built. The American dollar is as close to a global portable currency we have – offer it anywhere and you will likely get value in return. VISA, MasterCard and American Express are accepted in nearly every city in every country around the world. Cash and credit cards are about as ubiquitous as they can be. Disrupting this is not and should not be what this is about.
So I say start running.
Square, the pay-by-creditcard-for-the-masses company had a “Clayton Christensen moment” where they realized an entire market was being under-served by the incumbents. SME’s that would never be able to qualify for a merchant account with the traditional credit card processing companies where a ripe and ignored market. They are trying to solve that problem. Boom.
Adoption of a new way of doing things takes hold when it makes sense to a large number of people. The future of payments will come from consumer pull borne of convenience and ease of use. We’ve all seen how the incumbents roll – have you tried using your debit card lately? Is it a swipe machine (stripe to the left? Stripe to the right? Facing me? Facing you?)? Is it a chip machine? Do I need a pin with my credit card? CCID? Not seamless, not consumer friendly, not working. Rife with disruptive opportunities.
A wallet by any other name is, well, a wallet.
Have you seen my wallet? Full of cards, a notepad, receipts and pocket lint. That’s not what I want to replicate digitally. The vision of that mess is not what we should aspire to. The term “wallet” is simply wrong. I understand we need a metaphor but by using George Costanza’s wallet as that vision we are limiting the possibilities – we are putting constraints on our imaginations. When someone stands up and says “we will all be carrying multiple e-wallets” what is the first thing that pops into your head? Right. Not going to happen. Not going to be adopted. Not going to work.
Victory means grinding but not getting bloody
The Stanley Cup is said to be the hardest professional sports trophy to win. It is a gruelling battle of attrition at high speeds on skates, holding a stick, on a hard surface surrounded by wooden boards. Players hit, fight, hold, push, check and block bullets flying at 100mph. That’s what the mobile payments industry is shaping up to be – not for the weak or underfunded.
My feeling is the focus should be elsewhere. Let the big boys build the underpinnings of this system and focus on a way to enable the transactions – bring the smarts to the user. Build the value layer like Square did. Democratize the process and people will start using it. We are already seeing pieces of this in the industry. It isn’t a stretch to think of the perfect mobile payment system is it? What would you use? Here’s mine.
Build this and I will use it today
I carry credit cards, a debit card, a few loyalty cards, cash (less and less of course but when I travel it helps), coupons, receipts, lists (grocery, gifts, things I want, etc.) and tickets (train, plane, etc). I also need to pay bills and balance my bank account as well as classify and submit expenses. That’s me – pretty sure you aren’t any different.
When I open up for a purchase make it so it uses the most appropriate payment method available. For example, if my credit card is running a low interest special that insures my purchase at the same time, use it instead of cash. First check to see if the price is market value and if not, let me have the option to negotiate or buy elsewhere. Apply any and all coupons (the ones I know about or the ones I don’t – find them, apply them without me lifting a finger). Give me the option to apply loyalty points – or even sign me up for them on the spot (no paper forms please and, no, I don’t want to give you my email address…earn that by providing me some great service or value first).
You get the point here. To win in the mobile wallet game, make it easier to use, make it smarter than just payments, make it a seamless part of my day and wrap the most intense privacy protection around it all. Do that and I’m in. Do that and we’ll all be in.