This is my attempt to help readers sort out the wood from the trees in Mobile money. Lets start by looking at how we spend today.
Most people have multiple bank accounts, but what do they spend from them? Actually very little, mostly the spend from banks is via standing orders to pay regular items such as mortgages, insurances. Most of our daily spend is via credit cards and cash direct. This wasn't always the case, over time the credit card companies have taken over point of sale to the point that cheques have become almost obsolete. Online credit cards rule other than Paypal which offers a substantiation service, really a way to distance you the customer from the buy and proved some security but still backed by credit cards.
How will mobile work? There is a battle about to begin. Banks want to regain control from the credit card companies for very good reasons, they have gradually lost the commisssions on POS to credit cards and that is substantial money, trillions of dollars globally. Against this will be two forces, one credit cards trying to maintain their global reach and revenue, and new entrants, Google, Apple and others who want to wrest control of the POS from the traditional vendors by providing software "wallets" that become the new POS front end. Whoever wins the battle gains so much, not just the money from the commissions on sales, but the statistics and knowledge of the captive consumers habits.
Against all this is the software background. Banks have been historically notoriously slow to add services and reluctant to touch the consumer sales side. Plus credit cards have created a world network of business side relationships, ATMs, POS equipment all geared to their needs. But now a new technology called NFC Near Field Communications which allows a hand held device, a smartphone, to pay by waving it near a terminal, may offer a distruption. This is the playing field. A device technology that replaces credit cards, and thus offers an opportunity to eliminate the middle man....maybe.
In this world Monitise is providing the technology to allow banks to reach out to customers directly via smartphones. The fact that Visa is backing them shows that Visa wants to stay as the bridge. But I am sure Monitise will deal with Apple and Google and Paypal just as effectively, they are concentrating on one fo the most difficult tasks, that of gaining bankers confidence, a long haul but one if succesful will put them at the hub of the connectivity between banks and customers in the mobile age. I personally think the credit cards will win, but with the clout of Apples and Googles its certainly an interesting development.
Most people have multiple bank accounts, but what do they spend from them? Actually very little, mostly the spend from banks is via standing orders to pay regular items such as mortgages, insurances. Most of our daily spend is via credit cards and cash direct. This wasn't always the case, over time the credit card companies have taken over point of sale to the point that cheques have become almost obsolete. Online credit cards rule other than Paypal which offers a substantiation service, really a way to distance you the customer from the buy and proved some security but still backed by credit cards.
How will mobile work? There is a battle about to begin. Banks want to regain control from the credit card companies for very good reasons, they have gradually lost the commisssions on POS to credit cards and that is substantial money, trillions of dollars globally. Against this will be two forces, one credit cards trying to maintain their global reach and revenue, and new entrants, Google, Apple and others who want to wrest control of the POS from the traditional vendors by providing software "wallets" that become the new POS front end. Whoever wins the battle gains so much, not just the money from the commissions on sales, but the statistics and knowledge of the captive consumers habits.
Against all this is the software background. Banks have been historically notoriously slow to add services and reluctant to touch the consumer sales side. Plus credit cards have created a world network of business side relationships, ATMs, POS equipment all geared to their needs. But now a new technology called NFC Near Field Communications which allows a hand held device, a smartphone, to pay by waving it near a terminal, may offer a distruption. This is the playing field. A device technology that replaces credit cards, and thus offers an opportunity to eliminate the middle man....maybe.
In this world Monitise is providing the technology to allow banks to reach out to customers directly via smartphones. The fact that Visa is backing them shows that Visa wants to stay as the bridge. But I am sure Monitise will deal with Apple and Google and Paypal just as effectively, they are concentrating on one fo the most difficult tasks, that of gaining bankers confidence, a long haul but one if succesful will put them at the hub of the connectivity between banks and customers in the mobile age. I personally think the credit cards will win, but with the clout of Apples and Googles its certainly an interesting development.
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