New research last week suggested that the pace of movement towards mobile payments is gathering. Teamspirit has been tracking the rise of alternative payment methodologies for a while, but it would seem the big banks aren’t necessarily taking the threat of the spread of these systems, through social networks, that seriously.
I’ve blogged previously about the potential impact of Facebook bank, but in the absence of a full commitment to all services the Facebook credits system that has been introduced, and widely used for payment of services such as online gaming, is very reminiscent of the way Paypal leveraged E-Bay to secure a foothold in the payments market to ultimately launch across the entire web. Facebook credits could easily follow the same model and become much more than the virtual currency it is currently.
But apart from these large social networks moving towards transaction it is the tipping point, provided by the adoption of smartphones that we feel will probably see the category explode. The emergence of smart phones, which can simply enable mobile wallets and interact with both marketing databases and payment-settlement networks means these devices can provide a bridge for what are currently e-commerce processors to reach the physical point of sale.
Evidence of this trend emerged earlier this week with news that PayPal and Google have found ways to let accountholders with their payment systems use their handsets to tap those accounts with physical merchants. As always the internet is finding ways of sweeping away all the old traditional structures, this doesn’t mean that the banks will necessarily lose, but their strong survival will in large part rest on an extremely powerful mobile strategy.