WDN NewsByte... M-Commerce for All
by Nicki Hayes, March 07, 2003
Just as interoperability provided the key to the rapid growth of SMS messaging in Europe, interoperable mobile payments could help
make m-commerce a reality. So this week’s announcement by the four big European mobile network operators of the formation of the
Mobile Payments Services Association (MPSA) is to be congratulated. If only they could follow through by negotiating fair deals
with the banks, credit card companies, and merchants, we could soon be witnessing the kick-off of m-commerce for all, reports Nicki
Hayes, Wirelessdevnet’s European correspondent.
If this industry has learnt anything in the last two years it’s that interoperability is King. SMS in Europe taught us this for sure, and it looks like European operators are finally paying heed. Indeed, Orange, Telefonica, T-Mobile, and Vodafone, are setting up the Mobile Payments Services Association (MPSA) - an organisation that aims to drive m-commerce, and, more to the point, interoperable m-payments across countries, under a single brand. With 02, KPN Mobile Group and TMN also expressing interest in joining the MPSA, and an open invitation to other operators to participate, it looks like M-Commerce for all could finally become a reality across Europe.
So, what will the MPSA deliver?
The association aims to become the industry standard for m-commerce payments. For customers it promises the opportunity to purchase a wide range of digital and physical goods and services with mobile phones using an easy, secure solution. For merchants and merchant acquirers it promises a standard set of interfaces through which they will gain access to a potentially huge international customer base. Software and solution vendors will benefit from published technical interfaces enabling the development of compliant m-payment products and services. And operators will benefit from a standard way of integrating and efficiently managing their relationships with merchants, merchant acquirers and content providers.
But what could impede its progress?
To date m-commerce take-up in Europe has been impeded by fragmented, localised systems - meaning that merchants had to develop several payment methods. Greedy m-payment operators and low take-up meant that there was very little reward and very little point in developing even one system, as early adopters, such as Paybox, often found out - Paybox scrapped its consumer m-payment business with immediate effect last month.
In a statement, Paybox said it could see "no possibility for a single mPayment provider to develop the industry alone in the current industry conditions, especially amidst the discord between the other important market players. The necessary growth and profitability can only be reached with many active market players, which have so far failed to appear."
Well, the first part of the equation is in place, co-operation between telecom operators. But what will the banks, credit card companies and other market players do?
In part this will depend on how generous the operators are in their negotiations, and given this new cohesive spirit, and the potential of the pooled customer-base - which already stands at 270 million worldwide - there’s plenty to indicate that the rewards are there to be taken if the players can only get the balance right.
It also depends on the merchants developing relevant services, the main keys to which will be pricing and content. M-payment services have already been trialled to varying degrees of success with companies hoping to use the technology to drive sales of products priced in such as way as to be preclusive to credit card payments.
This is the right way to go. In the online world, while people buying books from Amazon, for example, will doubtless continue to use their credit cards, users may prefer to make smaller payments, typically of around a few euros, for services such as games, crosswords, downloads or website subscriptions, via their mobile phones. Offline, appropriate uses for m-payments include using your mobile phone to pay for travel tickets.
Surely, all parties involved have too much to lose not to make this happen, and the hired help has too much experience to allow it to flounder. Heading up the MPSA in London is CEO Tim Jones. He is a former head honcho at NatWest, where he ran the UK retail division and, previous to that, looked after Mondex, the ecash service, which was supposed to change the world. He advised:
“The history of the mobile phone industry shows that major business volumes only came when customers had the freedom to reach across and interact with any network. Our mission is to deliver that freedom in the field of mobile payments.”
“An open payment solution will help to take the mobile phone to a new level, where it becomes the single most essential item that people carry with them. Already there are over 270 million customers worldwide represented by our founding members, which presents mobile operators, merchants and the financial services industry with a huge opportunity...”
… And Mr Jones with another opportunity to change the world.
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About the author:
Nicki Hayes is The Wireless Developer Network's (www.wirelessdevnet.com) European correspondent and the part-time judge part-time jester of its new online debate -
Holding Court. Nicki also takes on freelance writing and corporate communication projects relating to business to business internet and wireless issues and has
contributed editorial to a number of publications including Unstrung.com, Wireless Business & Technology, Guardian Online, Financial Times, Banking &
Financial Training, eAI Journal and Secure Computing.
About the WirelessDevNet (www.wirelessdevnet.com):
The Wireless Developer Network is an on-line community for information technology
professionals interested in mobile computing and communications. Our mission is to assist
developers, strategists, and managers in bridging the gap between today's desktop and
enterprise applications and tomorrow's mobile users communicating via wireless networks.
We are interested in supporting the deployment of these evolving technologies through
high-quality technical information, news, industry coverage, and commentary. This
information is provided within a true on-line community that supports developer/vendor
dialogue through message boards and user-submitted tips, articles, links, and software
downloads.
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