Industry Insight: Mobile Payments - A Personal Perspective
Phil Davies, Managing Director of PSI-Pay gives his personal perspective on the exciting world of mobile payments.
Mobile payments have been around since, at least, Roman times assuming you include physical currency. For the purposes of this article let’s narrow things down to the last few decades.
Payment cards came into being in a global sense during the 1960’s evolving into what may be termed as pay before, pay now and pay later categories. Cards are now embracing contactless technology, although that has been around, albeit in closed loop form, since at least the early 1990’s as I recall. With the advent of ‘wearables’, bracelets, watches and other form factors contactless is, at last, taking off significantly and seems set to continue.
We have seen the emergence of crypto currencies over the past few years, notably Bitcoin, although one of the first anonymous crypto currencies, Digicash, I discovered was first introduced some twenty five years ago, although now long gone. There are still issues surrounding broad scale consumer acceptance of crypto currencies by the consumer at large most concerning are the volatility of such currencies, the significant rate of failure of the exchanges (remember Mt Gox?) and the reputational risks associated with the undesirable uses of crypto, money laundering and the like.
As to the future of crypto currencies well that’s an interesting debate in isolation. Apart from the above we have the current lack of regulation, the uncertainty of how each jurisdiction may or may not treat crypto plus the ongoing controversy over non compatible version of Bitcoin software make the future somewhat uncertain, so the jury will remain out for some time in my opinion.
OK, on to 21st Century. The proliferation of this definition of mobile payments is only made possible by technological innovation and the consumer’s acceptance of them. Technologies in the form of smart phones, tablet and other mobile devices and the software that supports them and their myriad of functionality. Although my researches revealed that as far back as 1997 a major drinks company introduced vending machines, on a limited scale, which enabled consumers to buy their drinks sending a text message.
I think there is a secure future for these devices that already have a critical mass of acceptance by the consumer, which is one of the most critical factors. Security solutions are evolving at an extremely fast rate and will not be a limiting factor going forwards.
To further endorse the bright future in store the big name hitters are now joining the revolution including Apple, Samsung, Google and others, thus furthering the acceptance and adoption by the mass market. In addition the ‘war against cash and cheques’ is catered for by the increasing amount of add-ons to devices held by ‘mobile’ merchants. So plumbers, gardeners, window cleaners and the like will be able to accept electronic payments on the fly and, in doing so, improve the financial dynamic of their businesses.
We are living in truly exciting times, from a payments perspective, and I’m excited to be a part of it.
Phil Davies is the Managing Director of PSI-Pay Ltd. Prior to heading up PSI-Pay, spent eight years with MasterCard Worldwide as Vice President-Business Development. There he was responsible for implementing new initiatives designed to encompass new products, technology and strategic partnership to stimulate growth in emerging markets throughout Europe.