Financial service companies are expected to invest about $110 billion in various payment technologies by 2017, with mobile getting a very healthy percentage of those funds, projects Frost & Sullivan.
“By aligning innovative payment technologies – particularly those based on mobile usage and new mobility trends – to industry requirements, the financial services industry can reduce total investments. While the initial investment to adapt IT services to industry needs is significant, the quick return on investment (ROI) and positive feedback more than makes up for this,” said Frost & Sullivan Information & Communication Technologies Global Programme Director Jean-Noël Georges. “Ultimately, this is a win-win approach, where the financial institution can minimize its spending on client account management while adopting a payment technology that facilitates mobile banking and associated services.”
The problem, as companies struggling with the intersection of B2B payments and mobile payments know only too well, is that mobile payments are an order of magnitude more complex—or prone to glitching—as its more physical counterparts. Security, accuracy, avoiding double- or triple-charges and keeping all data shared everywhere it needs to go—and nowhere else is a lot more complicated with mobile.
The analyst firm said that “the complexity involved in ensuring that payment solutions are interoperable, ultra secure, and certified has prevented product introductions. The development of technologies like mobile payment and mobile wallet has included entrants such as mobile network operators in the value chain, adding to the complexity of the payment ecosystem. Cloud-based payment solutions present an interesting option to overpass this market congestion.”
The report also discuss Near Field Communications and the argument that NFC will make mobile payments far easier, but it will slow things down in the nearterm. Better endpoint, but a longer and harder struggle to get there.
“Even though cloud-based payment solutions might be a threat to NFC in the short term, its deployment will boost the uptake of mobile payment solutions and consequently NFC in the long term,” Georges said. “This is exactly what the industry requires as mobile payment penetration has been lower than market expectations, mainly due to a fragmented ecosystem and the availability of excess of payment solutions involving different stakeholders.”