This white paper discusses the four themes that we believe will impact the evolution of the mobile payment market and how players should respond. Download it here.
The escalation of mobile has begun to impact financial services (FS) companies, and is changing the way we think about payments. While a dominant player has not yet emerged, and consumers have still not widely adopted mobile payments, new developments have occurred, providing a glimpse of the future. Today, we have identified four themes - technology, adoption, competition, and non-traditional opportunities - that impact the evolution of mobile payment strategy and shape how players should respond.
Previously, it was the financial institution that determined which technology to use. These days, no one player has enough power to determine what the technology should be. That makes investing solely in one technology or another a risk. As we see it, the co-mingling of multiple technologies is a more likely path in the adoption of a mobile payment strategy. Successful players are not only open to partnership options, but they also receptive to different technologies.
We see three new value streams yet to be tapped: small-ticket cash conversion, mobile commerce fees, and existing revenue streams at risk, such as interchange and interest income. Taken together, these add up to $20B of potential revenue at stake for FS players.
Given the immaturity of the space and its inherent risks, FS players have been cautious entrants with their mobile payment strategy. While they currently have tangible advantages and, as we see it, the battle is theirs to lose. It is imperative that they adapt to the changing environment, remain open to collaboration, and be receptive to different technologies. The 20 billion dollar prize is still up for grabs, but the question remains: who will win it?