I'm beginning to think that people who want to innovate in the mobile space (like outside alternative players) are moving at a much faster pace than the players who actually need to provide the foundation for these mobile services to function.
We already know that innovation is a-comin'. With all of the regulation swirling around making it increasingly difficult for banks to generate revenue from fees (and yet other studies-like the one from Pymnts.com- showing that even if they took fees from somewhere else, banks would most likely pay for it with the loss of customers), banks and other players need to do what they can to protect their interests in the landscape. Yet, it seems like the activity comes in cycles- after all of the flurry in late 2010 and the beginning of 2011, the dust has cleared and while there are a lot of exciting new announcements (AT&T/T-Mobile merger, ISIS, NFC trials all over the place), a survey conducted by Forrester Research of the top 15 U.S. banks/credit unions show that, particularly in mPayments, most players are content to sit on the sidelines and see how this technology plays out before making investments of their own. Another study by Fiserv suggests it's because financial institutions are focused on what the mPayment business case could be (according to their recently released white paper). And who can blame them? The mobile channel is still in question. A study released by the Federal Reserve Bank of Boston concluded that 10% of consumers had set up mBanking services in 2009, but a much smaller proportion actually used the services.
Traditional players are getting into the game though. There are a few front-runners, most notably Visa with its multiple NFC pilots. In fact, Visa Europe just announced that they plan to invest $144.2 million annually into mobile payments and e-commerce because they believe that this is where the areas of growth will be. Visa Europe expects that its cardholders will (~419 million cards in force throughout the EU) spend approximately $2.9 trillion dollars by 2015. Yet, at the same time, outside players like Vault Payments are continuing to make exciting announcements. Vault Payments, for example, plans to go mobile later this year with bar codes.
Even within the alternative player innovation-rama, they seem to be at each other's throats! Aislebuyer, for example, recently announced that they were going to be using image capture to add credit card capturing.Why is this a big deal? Because that means that other players (Square, anyone?) that offer POS services could be in deep trouble. So it's no surprise to see that Square is quickly attaching itself to a big hitter player like Apple. While many people are guesstimating that this move means that Square/Apple are getting in together to provide NFC services (a "meeting in the middle" of Apple's NFC plans and Square's corner on the cheap POS device market), another option is that Square was forced into this partnership because it desires to have greater market share, higher revenue, and basically be a critical stakeholder, but definitely lacks the backing to do so without the support of a technical behemoth like Apple.
What is the world coming to? Those that should be running quickly are content to sit on sidelines, value added services are fast outpacing the rate of typical consumption and the overall value of the mobile channel (still in question) is still being invested in through partnerships and impressive sums of money. Sounds like things will continue to get curiouser and curiouser....
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