[Dave Birch] At the recent Digital Money Summit in London, Tomi Ahonen noted that more people on Earth send text messages that use the Internet and that there are 3.4 billion mobile phones in use worldwide (of which three billion are unique subscribers). To illustrate the critical role of mobile phones in the future of payments, he used the example of South Korea to light up the trajectory of payment cards. There, half of the population already use mobile payments of one form or another

Incidentally, he also mentioned that 43% of the population there have a Cyworld account. I’ve written about Cyworld and it’s Acorn currency before, but this reinforced the view that we should not see virtual worlds such as Cyworld as games. They are not games — from the payments perspective — they are transaction spaces. Cyworld, by the way, is now the world’s second biggest music store after iTunes.

In South Korea, gift cards for the virtual currency used in Cyworld, known as dotori (“acorns”), are sold in more than 10,000 retail outlets as well as online and via mobile phones. Players use the currency to buy avatars and media to decorate their virtual space. Since one dotori costs approximately 10 cents, this market is obviously limited. Indeed, it amounts to only about $200,000. Per day.

[From Dave Birch: | Technology | The Guardian]

Tomi’s main point, though, and a point that has stuck with me since, is that we (ie, payments people) should not be taking existing instruments such as credit cards and simulating them on mobile phones, we should be creating “something that is magic” because great mobile services — whether Shazam, one of my favourites, or the cameraphones that convert English text to Japanese — look like magic to the consumer. Yes! Another manifesto commitment for digital money!

What might this magic be? I’m not smart enough to know, but I am smart enough to know that someone else does and that the mobile phone is absolutely central to the future of payments for as far as we can reasonably see. But an implication of Tomi’s “magic” comment is that simply taking existing plastic card payments and moving them over the mobile platform may not be good enough. it may be that payment providers would be better off thinking about new ways to deliver their services, ways that make something of the mobile platform’s particular characteristics. An obvious characteristic is the presence of a screen that can be used to deliver payment-related value-added services, such as coupons and loyalty scheme offers, but I’m sure there are many more to be discovered.

I’m going to be talking about this and some related issues in the Contactless, Mobile and NFC stream at the Cards & Payment Expo at Olympia in London on January 28th. I’ll be providing the keynote and then chairing a group of terrific speakers including Anne Caffrey from RBS Worldpay and Richard Mould from Barclays.

See you there!

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]


  1. creating “something that is magic” … is the essence of the 7th layer in my old 7 layer model. Money itself was number 6, only; the implication being that if you saw yourself as a payments provider you were going to fail.
    I guess it would be interesting to do some statistics to see how many payment providers failed to perceive that payments are for something, they aren’t stand-alone.

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