[Dave Birch] Earlier in the year I spotted some predictions about payments in 2011 and, since I agreed with all of them, kept a note of them. They were…

Mobile, mobile, mobile. Wallet in the cloud. The digital wallet. Call it what you want, but mobile devices are poised to become a primary form of payment for millions of people around the world… Consider that PayPal saw a 310 percent increase in mobile payment volume on Black Friday 2010 compared to the previous year, and a 292 percent increase in mobile payment volume on Cyber Monday 2010 compared to Cyber Monday 2009. Without a doubt, mobile payments are here to stay and will see significant innovation in the coming year.

[From Five payment trends to watch in 2011 | VentureBeat]

No-one could disagree. Every bullish projection made about mobile is, if anything, an underestimate. The vigour and energy in the sector is building weekly and everyone in retail financial services understands what Eric Schmidt of Google meant when he said that a company without a mobile strategy is without a strategy.

‘Appification’. IDC issued a new report that says, among other things, over the past three years the mobile apps space has seen an “appification” of “broad categories of interactions and functions in both the physical and the digital worlds.” And this only stands to continue — in fact, the same IDC report projects mobile app revenue to grow from $4.9 billion in 2010 to $35 billion by 2014..

[From Five payment trends to watch in 2011 | VentureBeat]

It’s certainly true that I spend a lot of money via apps but with example of the Financial Times live on my iPad right now I don’t know how the apps vs. HTML5 thing will pan out in the long run. What I have noticed, though, is that when apps are a couple of quid you buy them to try them out.

A Cashless Society. Now let’s not go crazy here, I’m not suggesting that by this time next year we’ll be living in a cashless society. Far from it. That said, 2011 will undoubtedly see several significant steps that will take us closer to such a world.

[From Five payment trends to watch in 2011 | VentureBeat]

Given that I bore for England on this topic I don’t want to go into it here, except to say that I think I can see two schools of thought emerging about this. The mainstream, if you like, sees cash usage maybe halving over the next decade.

Will these lead to a cashless society?… But it will lead to a less cash society.

[From The Financial Services Club’s Blog: Not cashless but less cash]

A more radical prediction, though, might be that while cash usage will continue to fall it will reach a cusp sooner than many might imagine: I think we can already observe this phenomenon in the Netherlands, where some shops are now cash-free.

Social shopping is clearly poised for significant growth… Among the key drivers of this trend are micropayments and digital goods. Along the same lines of merging physical world experiences with digital activity, the ability to make quick, small purchases for online content represents a huge opportunity for both content producers and providers.

[From Five payment trends to watch in 2011 | VentureBeat]

A topic in its own right, but yes it’s very clear that connected consumers don’t behave in the same way as consumers of old and with Zynga looking for a $20 billion IPO there must be plenty more imaginative and entrepreneurial people looking in that direction. But it’s this last prediction that I want to focus on.

T-commerce. TV will go from a passive (viewing-only) experience to a highly interactive activity as more and more apps are developed specifically for the platform.

[From Five payment trends to watch in 2011 | VentureBeat]

Many years ago, I contributed to the Centre for the Study of Financial Innovation’s report on “The Internet and Financial Services“. I made what I thought at the time was a bold, but reasoned, prediction that the focus on the PC and the web was too narrow and that both mobile and television access to financial services should be part of financial services organisations’s strategy (although I underestimated the growth of mobile and overestimated the growth of what we now call “connected TV”). I was reminded of this when I saw a tweet by the always provocative (and accurate) commentator Dean Bubley of Disruptive Analysis. He said…

The arrogance of the mobile industry is staggering. “The Internet will be mobile”. Really? Tell that to all the companies selling Smart TVs

Dean’s comment stuck in my mind because I’d just purchased a new Panasonic TV and home cinema sound system. Now, the TV and the Blu-ray player both have ethernet ports, as does my Apple TV (which I had been using in wireless mode). So I dug out my Apple Airport Extreme that I used to use to stream music before I got the Apple TV and configured it as a bridge to my home wireless network. Then I got a fast ethernet switch and connected it to the Extreme. The I plugged the Apple TV, the TV and the Blu-ray player into the switch and, hurrah, they’re all online. The first thing my TV did was phone home and download a software upgrade! So perhaps connected TV is finally coming to the mass market after all.

You’ve hailed connected TVs as the future of television. How will the BBC embrace this? /
During any one week, we get somewhere between 10m and 13m people in the UK accessing our red button services.. we see a huge potential in migrating those people who are familiar with red button services to being consumers of each of our 10 products in the digital world.

[From INTERVIEW: BBC general manager for news and knowledge on connected TVs :: StrategyEye – Industry Intelligence]

What will you do with your connected TV? I imagine that one of the things you will do is buy stuff, so bringing payments to the channel is vital. Consult Hyperion has done plenty of work on this in the past (we worked on the Sky Barclaycard, for example) and we put forward a number of idea for using one-time password, remote controls and even NFC on different TV-related projects.

Perhaps these aren’t radical enough visions though. Some of you may remember that at the Digital Money Forum a few years ago we had a number of students from the Royal College of Art (RCA) in London come along and share their visions for the future of payments with us. We were all knocked about by the super stuff that they produced. I remember one chap who predicted, to universal amusement, that we would soon be paying with gestures. Far fetched? Well, MasterCard demoed that this week.

Most impressive — or frightening, depending on how you look at it — was the Xbox Kinect prototype. To purchase a product on TV, users simply wave their hands at an icon in the corner of the screen.

[From In MasterCard’s Future, You Can Buy Things by Waving at Your TV]

Life, once again, imitating art. This set me thinking about how difficult it is to imagine how technology might be used in the future. We’re all familiar with Arthur C. Clarke’s famous observation about advanced technology being indistinguishable from magic, perhaps we should develop a corollary about advanced financial services being indistinguishable from games.

These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers

1 comment

  1. Dave, you and I were both pontificating, with great confidence, about the cashless society being well established to the point of near-ubiquity, within five years. In 1991. I stopped making that predication in about 1999 when I realised it was becoming an annual mantra. What we’re now seeing are, rather than the universal and ‘pure’ cashless (interpersonal, anonymous, arbitrary, casually interoperable) systems we hoped for are a mishmash of purpose-specific models, most of are still subject to underlying minimum transaction costs and very few of which have any capability in their architectures for federation into a wider consumer service. There’s a massive failure of vision in an entire industry here, with service providers and product developers operating below that strategic hinge point between defining service-local needs and strategic solutions for an entire market, which of course grows the whole market to everyone’s benefit. Slightly ranting here due to the overhead we’re having of the number of discrete back-end transaction mechanisms we’re having to put in place for our new hybrid TV service: creating the radical delivery technology was the easy bit: creating the backend from what should be commodity services will be a continuing pain.


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