1. Processing "Rails" and Transactions – Do Mobile Payments alter the traditional 4-Party payments system? If yes how?
2. Incumbents and Their Actions – What are incumbent card networks doing to adapt to the rapid changes brought by Mobile Payments?
3. Targeted Offers and Data Ownership – How will the adjacent "Targeted Offers" market develop? Who owns the underlying data?
4. Ecosystem Evolution – What will the Mobile Payments ecosystem look like?
5. Technology Choice and Timeframe – Which technology is likely to win and become the global standard? Will it be the early leader, NFC (Near-Field Communications) or will cloud-based or other solutions win? When will the infrastructure be in place for widespread Mobile Payments?
6. Global Standards and Regulation – Will a global Mobile Payment standard emerge to address regulation, security and privacy concerns?
7. Mobile Wallet Attributes – What are the desirable attributes of a Mobile Wallet?
8. The Holy Grail: Consumer Adoption – What will drive consumer adoption?
We find most importantly, that mobile payments could simplify and alter some elements of the traditional four-party payments system as information and interaction increase in importance, versus the actual payment transaction itself. The type and timing of technology is still not clear but what is clear is that in the last 6 months, new and credible non-NFC solutions have emerged. Infrastructure must be upgraded to enable Mobile Payments for any technology that becomes the global standard and the timeframe will be technology dependent. Merchants may very well wait until there is more clarity on technology before making investments towards adoption. Finally, we believe consumer adoption will depend on the presence of a “killer app” – an app that is simple for both consumers to adopt and use and is widely available.
Although we are now able to hazard a guess at the lay-of-the-land for a future Mobile Payments ecosystem, we still look for a multi-year path to reasonably widespread adoption. It may be a long and winding road, but every day brings us closer to reality.
