When Platforms Collide; Mobile and Payments

A few weeks ago, I wrote a post that covered my areas of investment interest for 2010. Three of the areas I find most interesting are the mobile ecosystem and the payments sector and the theme of “platform” business models. You can find that post here. The natural question I’ve since been asked is:

“What about mobile payments?”

My friends at PYMNTS.com asked me to join in the discussion in their Briefing Room on Mobile Payments. My answers are here. As you will see, the format of the briefing room is five questions, with the emphasis on the intersection between payments and mobile application development platforms. I tried to answer the questions as directly as possible, but in the process, a couple of things went unsaid.

So, to add to the Briefing Room post, I should say I’m a big believer in mobile payment. The phone will be your “wallet” some day, although I can’t tell when. My sense is that adoption for online and mobile web/application payment will precede mobile payment at the traditional point of sale. I’m most interested in mobile payment in economies where electronic payment is an emerging alternative like developing economies and in last cash markets where the connectivity enabled by the mobile phone provides an entry point for electronic payment services to displace cash.

Regardless of the sector, I’d argue that mobile payment has to add value to the payment process to fully take hold. It is not sufficient to simply replace an existing electronic payment transaction with a mobile originated payment. That will cost more to the merchant, because it adds layers to the value chain and fundamentally adds no value.

Show me an opportunity to invest in a payment business leveraging mobile with a clear value proposition in a market segment that is accessible in the near term and you are likely to find a very engaged and interested prospective investor.

When Platforms Collide; Mobile and Payments
  • http://reidcurley.com Reid Curley

    You could argue that the ability to donate to the American Red Cross by texting “Haiti” to 90999 was the first large scale use of mobile as a payment mechanism. Will this have any long term impact?

    • http://www.derekpilling.com Derek Pilling

      I’ve heard others make the case that the Haiti mobile donations are a watershed moment for mobile payment. Personally, I don’t see it.

      Regardless, it is great to see people contributing to help the people of Haiti, no matter the mechanism.