Mobile Platform Wars

As part of the Mobile Platform Wars Briefing Room that is currently being run on PYMNTS.com, I was asked to respond to 5 questions regarding mobile payments.

The content below is a cross-post from that entry for those of you who may not be familiar with PYMNTS.com

What’s the most significant payments application for mobile platforms that you’ve seen in the marketplace and why do you believe it is significant?

Square, by far. The significance, interestingly, lies not in the “workflow” of card acceptance on a mobile device. Instead the innovation is in the business model of Square acting as a master merchant on behalf of their merchant customers thereby obfuscating some of the complexity associated with card acceptance. Does this mean there are issues of fraud and risk they have to address? Of course it does. However, as an example, a non-profit where I sit on the board of directors would find this workflow incredibly useful for donation purposes at quarterly events.

With that said, portions of their workflow are extremely compelling. The ability to register card and image of cardholder on Square’s Web site acts, in a fashion, as another factor of authentication during the transaction process.

What are the most important applications that you believe will be developed and deployed for mobile platforms in the next year?

My interest lies less in mobile specific applications and, instead, in how mobile channels can be used to supplement, and (perhaps) improve extant transaction processing flows. With that in mind, the two workflows that I find most intriguing, at present, are:

  • Mobile Receipting – If mobile receipting, either via SMS or e-mail, can be simply integrated into current points of acceptance (regardless of channel) the consumer market begins to be primed for usage of the mobile device in other ways.
  • True Multi-Channel Experience – The ability, specifically at Tier1 retailers, to carry my preferences, points balances, etc as part of my identity whether interacting via mobile, kiosk, ecommerce, or at PoS changes the game for retailer affinity. It will be interesting to see how, or if, the presence capabilities represented by mobile devices will be exposed.

Will mobile phones change how people shop at the point of sale and if so how?

There is potential for modifying the user experience at PoS. As of late, I’ve been purchasing the periodic morning coffee using the MocaPay mobile gift card solution. And while the experience is compelling…adoption may always remain a challenge for this specific user experience. The issue, truly, starts with industry recognition that the “smart” mobile devices (iPhone and the ilk) aren’t simply a “phone” but a connected device. The “internet” becomes infrastructure for delivery of payment experiences to these devices…whether that experience interacts with a traditional PoS or not.

How does Google’s Android operating system and mobile strategy stack up to Apple’s iPhone and does Google have any advantages?

The battle between “open” and “closed” is near and dear to my heart. And yet, I find myself less critical of the Apple experience than many…particularly when it relates to payment applications. When payment data, or (in fact) any sensitive customer data, is integrated to a mobile device additional caution must be taken to ensure the application is handling the data appropriately. I will be intrigued to see if either of the major players decides to align closely with the PCI SSC on assisting with the implementation of standards for application development as it relates to payment applications.

In general, the fact that Apple has tight control over the development tools, ecoystem, and hardware enables them to both dictate and control workflows that are developed thereby growing at a substantially quicker pace. With that said, I expect that each iPhone workflow (particularly those that are successful) will be ported to other devices in short order.

Will the mobile platform wars make the widespread deployment of contactless at the point of sale more or less likely and why?

I, personally, have never been as bullish regarding contactless as some. The issues of driving both consumer and merchant adoption without a compelling set of benefits seem rather challenging. With that said, the position taken by those like BlingNation has changed this dynamic somewhat. However, assuming the process of affixing an RFID bugged tag to a phone as the reason that “contactless will succeed” is a bit of a stretch.

What’s your perspective? Agree? Disagree? Anything to add? Critiques? The comment form is below…

February 12, 2010

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