Payments Evolution in the Mobile Millennium: The Challenge of Aligning Solutions to Customer Needs

by Margaret Weichert, Managing Director, Market Platform Dynamics

In the United States and much of the Western world, discussion and debate among “payments professionals” has been consumed in recent years with technology debates and regulatory battles, even while the broader world continues its steady march towards the new realities of a mobile millennium.

In developed markets, e-commerce continues to grow at double digit rates, despite the relative maturity of those markets. Still other less developed markets, such as Mexico, are experiencing triple digit e-commerce is growth, as broader economic growth and technology access to mobile Internet capabilities dramatically ramps up the e-Commerce/m-Commerce markets. Even markets with relatively low overall Internet usage are poised to experience dramatic e-Commerce growth as banks, policy makers and business leaders recognize that the mobile web is a profound tool for financial inclusion. Low cost internet-enabled POS devices will enable a wide range of consumers to have access to web-enabled commerce. In India, for example, nimble entrepreneurs and technology companies are working diligently to enable 250 million Indian debit card users to get access to the mobile web via POS mobile technology.

Mobile commerce is already a meaningful part of the payments ecosystem and is poised to grow even faster than e-commerce did. However, one of the biggest challenges in global adoption of mobile commerce solutions is a fundamental mismatch between the payment preferences of most global consumers – for debit card payments – and the accessibility of debit-oriented mobile payment solutions, especially in the quickly evolving world of mobile web commerce.

While mobile innovators are developing entirely new mobile business models, complete with different economics, customer value propositions and consumer-oriented, lightweight (often cloud based) technology solutions, traditional payments companies are deep in discussions about NFC, EMV, and interchange – issues that remain rooted in the realities of the 20th century, and do little to meet the practical challenges of the new mobile ecosystem. Many in the payments industry have focused on credit-card centric models that view mobile technology as simply another form factor that will replace plastic cards for POS transactions.

However, the reality of the evolving mobile commerce is much more complex and dynamic and requires more thoughtful solutions.

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Margaret Weichert is a Managing Director at Market Platform Dynamics. Margaret is an experienced payments industry executive with a proven track record of commercializing new technologies in small start-ups, and large multi-national corporations. An acknowledged leader and innovator in payments and financial technology, Margaret has received seven US patents and is an inventor on many additional pending patents. An entrepreneur who has started two of her own companies and sold one to First Data, Margaret has also proven experience commercializing game-changing technologies, including a range of mobile banking and eCommerce capabilities, unique commercial cash management solutions, Internet Check and Checks by Phone solutions, fraud and risk management solutions, new point of sale technologies and many other payments, risk management and financial services solutions. For her full bio, click here.

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