Mobile Payments Need a Compelling Application

Implications:  

For mobile phones to become “mobile wallets”, an initial compelling application is needed that tests the technology options:
    1. Over-the-air (OTA) using the network,
    2. Building a debit/credit card into the handset,
    3. Contactless payments,
    4. Near-field communications (NFC),
    5. Internet or SMS-based.

Analysis: Mobile payments need a compelling application that tests the options of network versus handsets.  The testing involves the differences in the points-of-sale (POS), credit information and product or service delivery.  The use of wireless payments differs greatly for transit fees, entertainment, vending machines, and retail store POS.  The over-the-air (OTA) access will succeed for transactions that do not involve an immediate product.  But for products from retail point-of-sale, the need is probably for a debit/credit card in the handset.  And the most widespread applications are campus vending machines to use contactless and near-field communications (NFC).  The starting point for compelling applications could be travelers that need a combination of online, contactless and person-to-person.  The largest initial test might be McDonald’s launch with NTT DoCoMo in Japan for cellphone-based credit cards and information-capture at the store POS.