[Dave Birch] Forum friend Rory Cellan-Jones put together a fun package about the current state of mobile money in the UK on the BBC this week. It was basically about how mobile payments of one form or another are in the very early stages in the UK and don’t work as well as a mass-market consumer technology really ought to.

BBC technology correspondent Rory Cellan-Jones loaded his mobile phone up with a number of payment apps and tried to live without cash for a few days.

[From BBC News – Is it possible to live on mobile money?]

I thought it was interesting: I’m in Australia at the moment, and today I used my mobile to pay in Starbucks and in the cab tonight – they both had contactless readers and they both accepted my UK NFC phone no problem. It was not the best customer experience in the cab because when I tapped to pay using my Barclaycard PayPass credit card the authorisation was (offline and) instant, but when I tapped to pay using my Quicktap phone, which has a Barclaycard Paypass prepaid card in it, the authorisation took a minute or two as the terminal had to go online. Tapping and getting out of a cab is a great user experience, even though you have to wait a few seconds for the receipt to print, but tapping and waiting for a minute or two for authorisation seems like an eternity. Still, at least the cheerful local taxi driver was happy to spend time as an acolyte in the quest for knowledge while a tried a couple of different cards and the phone.


Remember, I do this so you don’t have to. Anyway, in Australia, I could easily live just using my phone. So far, all of the shops (except one small convenience store that I went it) have had contactless terminals, which seem to be well used, and all of the taxis have had CabCharge terminals that work perfectly with my UK-issued contactless payment instruments. I reckon I could go without cash completely next time I come to Sydney. In London, as Rory found, we seem to have some way to go.

Part of the problem that Rory came across was that mobile money transfer and mobile payments have different contexts and focus. The direction of mobile payments is wallets, where the payment is only part of the shopping interaction with phone. There are some really interesting developments going on here, and I think Rory may well find that paying with his mobile phone is heading mainstream earlier than his first experiments might suggests because the range of options is growing. Take a look at today’s announcement from PayPal, for example.

Paypal has launched an app which could put paid to both cash AND credit cards – letting users pay via any smartphone in shops… even where there’s no wi-fi or mobile connection… PayPal inStore works by generating a barcode on screen, which the shop then scans to take money from the customer’s account.

[From Paypal unveils new app that lets you pay in shops direct from any smartphone – and predicts ‘you won’t need a wallet by 2016’ | Mail Online]

As the retailers and PayPal add functionality to the inStore app, given the control that the retailers have over the payment experience, it may become difficult for non-retailers to get in the loop. Back in 2007, I wrote that

Isn’t this a nightmare come true for the payments guys in banks? The retailers and the mobile phone operators getting together to provide a new solution to a problem that is not central to either of them but as a byproduct of achieving some other goals — perhaps customer intimacy or reduced churn — chips away at legacy payment systems provided by banks and while the payments guys are concerned about it, the bank isn’t, because it’s a bank line of credit that the customers are using to fund their mobile phone / retailer payment schemes.

[From Digital Money: Pincer movement]

I still think this is long term direction of the industry, as payments separate from banking and customer choice about methods, schemes and technologies explodes. There are plenty of reasons for thinking that retailers will be able to make their wallets deliver the best customer experience for their stores. My Tesco wallet and my Starbucks wallet might both use the same Barclays debit card and proof of age and Post Office-provided official address but they will bundle and present them in ways that are optimised for their shoppers and their shopping experiences.

P.S. A small suggestion for the CabCharge guys – why not provide a CabCharge wallet that contains electronic receipts that I can print out a summary of at the end of the month from a web page, a bit like RingGo for parking.

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



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