M-Payment Disruption Is Coming...Once It Grows An M-Brain

/Phones-BBIt used to be that you couldn’t tell the players without a scorecard. Now, everyone needs an infographic. And when the topic is m-commerce, the number of alliances, stakeholders, and unknown elements involved could make the classic Kawaja ad network chart look like a simple game of Chutes and Ladders. SapientNitro, which has worked with a number of major brands on their early mobile retail and m-shopping experience, is trying to be ahead of the m-payment curve with a massive (we mean massive) infographic. 

Yeah, yeah, I know. How many of these skyscraper data visualizations can we get each day? This is one I like because it goes beyond the usual simple aggregation of research data. Here, SapientNitro actually charts out the history of electronic payments and graphs out the some of the complex sets of players that need to be involved here. You can get the full data climb reprinted at Mashable or have the tower parsed by floors in the embedded slide deck.  



To wit, the infographic walks through the distinctions among the commonly conflated terms of “m-commerce” (purchasing via mobile Web or online wallet), m-payments (phone as credit card for a range of goods) and m-wallets (deeper wallet replacements).  Most interesting are the four possible scenarios that SapientNitro spins out for m-payments.

In one vision, independent entities will simply test their models in small markets to see how they work and what shakes out in the larger ecosystem. In another path, one major player invests heavily enough to stimulate others. In another, carriers and/or financial institutions buddy up to share risks and craft uniform business models for a broad confederacy of small partners. And in another possible route all of the major players, from carriers to bank to hardware OEMs, app makers and chip vendors would come together to agree to industry-wide standards.

Needless to say, it is entirely unclear which of these paths is most likely to pan out. The first vision of little tests is already upon us, and the un-launched ISIS consortium of some players are trying to buddy up. But as the industry surveys of professionals in the space attest in this infographic, widespread disagreement remains about who will charge whom and share what money from these systems.

In addition to handset manufacturers like Apple and Samsung, there are the OS makers (also Apple) like Google and Microsoft, credit card companies, the carriers themselves, incumbent online wallets from Amazon and PayPal, among others, and (oh yes) the virtual currency players like (wait for it) Facebook.

But even when the ecosystem is sorted out, there is still the hurdle of consumer adoption. According to research in this infographic, half of Japanese handsets have been NFC-enabled for a while, but only 10% of consumers there have ever used these mobile wallets…ever. As SapientNitro lays out, issues of privacy and security, interoperability of systems, lack of business models and of consumer use cases all impede progress in m-payments.

Many in the industry still believe that we are looking at mobile payments going mainstream in 3-4 years. Well, there are a lot of hurdles to get over by then -- made all the more difficult by the tons of money at stake here. My advice to the mosh pit of companies striving toward an m-economy?

Stop trying to solve a problem that isn’t there. My wallet is not a problem. My credit card is not a problem. Loyalty cards -- well yeah, those are a pain, but most brand apps are addressing this. Don’t over-reach on selling this model as some revolutionary convenience that it isn’t. Tiresome as it may sound, imagine harder about what real value is in it for me. In my mind, the m-payment piece of this is the least compelling part of the model.

The real potential here comes when the payment is connected to a massively powerful pocket PC with so much of my other data. The credit card just grew a brain, even if it doesn’t seem to be thinking much yet. There is a chicken and an egg here. The compelling consumer cases really can’t emerge unless and until a viable m-payments system is in place to drive development. But consumers are not likely to be impressed with a simple m-payment trick unless it is attached to some genuine value-add. Now it’s time for that brain on your credit card to start thinking.   

Future of Money Infographic
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1 comment about "M-Payment Disruption Is Coming...Once It Grows An M-Brain ".
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  1. Rob Gonda from Sapient, May 3, 2012 at 11:36 a.m.

    Glad you enjoyed our infographic, totally agree with your comments.

    For a deep dive on our thinking and more detail about the data behind the infographic, please read our post at

    Would love your feedback!

    Also, yes, it's a massive infographic ... we broke it down into 21 slides for those who prefer it that way.



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