Monday, 22 November 2010

Contactless payments by mobile phone could become mainstream in 2011

Something odd happened in the past couple of years. Everyone stopped asking whether it’s the year of the mobile. That’s probably because mobile has now become mainstream and with the mainstream comes the tsunami of innovation, not least in the financial services sector.

This week Nokia announced that they were making a huge move in the mobile payments market to move closer to contactless payments with the launch of their C7 phone in 2011. The rumours are that the Near Field Communications (NFC) technology required are also appearing in patents being filed by Apple for the new generation iPhone and in addition Eric Schmidt, Google’s CEO has also announced that they working with NFC technology for the android platform. So does this mean an era of contactless payments may be just around the corner?

Alex Kwiatkowski - Principal Analyst in Ovum's Financial Services Technology Team voiced some doubts stating that 'While the ecosystem is evolving, old concerns (10+ years) over a viable business model for sustainable/decent revenue remain' he went on to say 'Nokia pulled its 6216 device (using NFC & SWP) in Feb '10, due to current state of NFC ecosystem and poor consumer experience.' So Nokia definitely have some credibility issues when it comes to the technology and with Symbian still performing so poorly, the issue is compounded.

However as always with Google and Apple in the frame the play becomes more serious from a software perspective and with Nokia’s ability to flood the market with low cost hardware, the battle could be fought on two fronts.

Ecosystem and revenue concerns there may be, but with 3 such massive players making a play and a whole host of bit part players around the edges, you get the impression that there must be something in it. Personally, the sooner I can get rid of my wallet the better so I’m hoping we’re not far away.

Wednesday, 3 November 2010

Lessons from Sibos 2010

Sibos drew to a close at the end of last week and while the cream of the banking industry were there in force with some of the largest stands ever seen, it was noticeable how many new players were present . Reflections on the conference can be found here, but the innovation on show covered in the main, mobile, the cloud and the future of business payments. All of which are putting more and more power in the hands of consumers.

Strikingly amongst all of the big banking that was being talked, there appeared to be a groundswell of new businesses coming together to promote new models. The first project that had real stand-out was a view that we were about to see the new Financial Reformation.

This bold vision was echoed by the Future of Money project. The project started out as a blog post, a few weeks prior to this year's Sibos. It was a post that galvanised small businesses with a vision for the future of transaction, payments and new economic models, to not only donate their time but their money to build this vision for the future. This is a vision that cuts out the banks and relies on communities to find ways and means to build new transactional models.

It is inconceivable that these views would have been given exposure at the same event some years ago. However, it is a measure of how the financial crisis has hit the sector that there is a real challenge to the old model in their own backyard.