Mobile payments set to fragment?

Mobile payments, especially around retail, is becoming a very hot topic. The idea of using NFC for contactless payments from phones is gaining pace, even though bar one Nokia handset and some stickers, no one is doing it. It has, as ever, all been spurred on by rumour that Apple is going to build NFC and a card chip into iPhone 5 (well it was, then it wasn’t, now it seems to be on again). Google is also looking to do the same.

But with no hard evidence that any of this is actually going to happen any time soon, where does that leave mobile payments? As we saw last week, PRS revenues are growing, spurred to some degree by people using PSMS to buy Facebook credits to interact with TV shows, but when it comes to the real money pot – the retail sector – nothing really is happening.

Operator billing, as we all know, is too expensive for retailers to consider using. Then there is the problem that a growing number of people are accessing retail sites from mobile devices but using wifi (as many as 75% according to one company), so any form of operator billing becomes  clunky at best if plain irrelevant.

Then there is the issue of consumers themselves. A study by Kony Solutions, which builds apps management platforms finds that only 16% of consumers would prefer to use operator billing to pay for things, with the majority (75%) wanting it to be something directly linked to their card or their bank account.

The reason? They don’t trust the operator to get it right. Too many people have problems with their mobile phone bills as it is without having to trust it to cover other purchases.

So does this mean that telemedia billing as we know it is doomed to never get a slice of the retail space? Well no, but it is likely to be limited to the sub £10 mark. That said, however, that is a potentially very lucrative space in itself and, handled correctly, could well be a nice niche to carve out for that kind of payment – especially for those without credit and debit cards, or who wish not to use their cards for some purchases.

Mobile payments are meant to make things easy and simple, but the fragmentation that this turf war will bring could see it consume itself. Having one set of payment tools for low cost items, another for in store buying, yet another for online purchases – as well as having to have cards and cash for those places that won’t be doing contactless mobile payments – makes for a more problematic world for the consumer than we have at present. Progress this ain’t.

The debate will rage on for many months – not least until iPhone 5 arrives – but to get a clearer understanding of how the changing landscape effects mobile payments, our panel at Telemedia360 in Leeds on 11 May is set to at least try and clear up how the billing landscape may work in 2012 and beyond. Register here to learn more