Your recent article on mobile payments [
In West Central Africa, especially Kenya, almost 70% of the population possess or has access to a mobile device. Device prices are very inexpensive, and airtime minutes are also very inexpensive compared to U.S. prices. Mobile commerce volumes in mobile payments have grown 100% per year since mobile commerce started over the last 4 years.
Some factors, such as the lack of an infrastructure in the developing world, have caused the growth of mobile commerce to be explosive. Contrast this fact with the U.S., where the infrastructure is so well developed that there will need to be very compelling reasons why merchants would invest in mobile commerce transactions since most consumers have at least 4 plastic cards with them at all time.
The most compelling reason or value proposition for a merchant to make the investment in mobile commerce is if the cost per transaction is less than the cost of a card or check transaction. For this to happen, the large merchant providers and the card associations would need to build a separate cost structure for mobile transactions that is compelling for merchants to accept.
All of this reasoning, while important, pales in comparison to the primary stumbling block of mobile commerce in the U.S. Unless the telecomm industry and the banks agree on a comprehensive revenue sharing model that is attractive to the merchant base, the mobile commerce industry in the U.S. will continue to be a series of one-off initiatives. Some companies have proposed a comprehensive ecosystem that can begin to resolve these divisions.
I have worked in payments industry for many years. The life cycle for mobile commerce in the U.S. is very early and will not be a viable alternative until a number of factors with the telecomm industry, the banks and the card associations converge into a cohesive agreed upon operating model.
Regards
Patrick J. Brennan Jr.
