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Mobile money in 2012 and preview of 2013
It has many names and many elements, but in the end it all comes down to money, specifically “mobile money.” 2012 was a big year for mobile money, and one can only assume 2013 will be even bigger. As the mobile industry starts to count down the days to its biggest trade show of the year, Mobile World Congress, which for the fifth year features a Mobile Money Pavilion, we asked three executives about their view of the biggest development in mobile money in 2012, and what they anticipate will be the biggest development in 2013.
Each of these executives agrees that 2012 was the watershed year in which mobile money started to become widespread and mainstream. 2012 saw several new entrants, a lot of news coverage on mobile money and forecasts for explosive growth. In August last year, industry analyst firm Juniper Research indicated the market is at the base of the hockey stick effect, forecasting that in 5 years, by the end of 2017, the mobile money market will be worth $1.3 trillion.
Marc Gardner, CEO of mobile point of sale (mPOS) company PayAnywhere says, “The acceptance of credit card payments on smart phones and tablets,” was the biggest development in mobile money in 2012. In fact, 2012 was the first year that credit card payments made on smartphones and tablets topped $10 billion (closer to $20 billion) in the United States alone.
Brad Singer, executive vice president of direct-to-bill mobile payments provider PayOne, saw an ecosystem solidifying around mobile money. Looking back at 2012, Singer notes how all the major players in the financial ecosystem finally recognized “the importance and potential of mobile money and all the surrounding 1:1 personalized mobile engagement value.” These players include the major financial institutions, wireless operators, payment providers, brick and mortar retailers, traditional and new networks, as well as major technology and Internet companies.
As further evidence that we may all look back at 2012 as mobile money’s tipping point, Siva Narendra, CEO of Tyfone, technology provider for mobile banking, NFC payments and secure identity, sees the rising tide of a power struggle between the various stakeholders in the payments ecosystem around mobile money. In the end, Narendra predicts that the banks will own the major piece of mobile payments citing as evidence developments in 2012 that included “congressional hearings on mobile payments essentially asking for new regulations if banks don’t own it, to Visa’s cease and desist letter to Google, and Verizon’s blocking of Google Wallet.”
Looking ahead to what will happen this year, the three executives agreed that simplification would be a key theme, but they differ on when and how that will happen.
Singer predicts 2013 will be a year of both simplification and reality in mobile money. Says Singer, “This early phase of mobile money is too confusing and complicated, with overwhelming, conflicting and over-hyped choices for the average consumer.” Singer predicts that consolidation and simplification in the space is inevitable this year, and views the bridging of online and offline commerce as a must this year as well.
Narendra doesn’t see this market simplification happening until late this year. “More fragmentation and consumer confusion in the market on ways to use mobile for payments will dominate the market conditions in the first 3 quarters of 2012, followed by the last quarter spent realizing the need for consolidation and a unified consumer message.” Narendra predicts that it will be the banks and credit unions that will drive these important changes.
Gardner sees the credit card issuers driving the big changes in mobile money in 2013. His prediction on the big event in mobile money this year? “The massive marketing launch of Visa’s V.me digital wallet on smartphones.” Gardner further expects that in 2013 we will start to see tablets replace cash registers and traditional payment processing peripherals and terminals not just in small businesses that are more mobile in nature, but in mainstay retailers with brick and mortar locations. He believes the companies embracing this evolution will benefit from being a first mover in deploying what will be the mainstream way to provide point of sale solutions in the near future, which not only replace traditional systems, but also add new features and capabilities to enhance the customer experience and create new levels of business intelligence.
What do you predict will be the biggest development in mobile money in 2013? We invite you to share your forecasts for this year in our comments.