I promise to pay the bearer on demand the sum of five pounds. And as long as the Governor of the Bank of England has signed it, it is deemed legal tender. On this basis when I hand you a five pound note you accept at face value that I have handed over money and not just crumpled piece of paper. In the US, they say This note is legal tender for all debts public and private.
Interestingly, the Euro note makes no such assurance or promise and perhaps with what’s going on in the Eurozone, that’s no bad thing! Well, our promise to pay the bearer is about to be condemned to history. The mobile revolution is coming and pretty soon we’ll just wave our mobile phone in the air and its job done. At least that’s the message coming out of the Mobile Money Summit in Milan this month.
If anyone was in any doubt about this they could pick up a free mobile phone at the summit (on loan of course) and use it to buy their tickets on the tram, get around town, and even buy goods in the shops – and hey, it all worked. Pretty impressive. A quick spin round the summit convinced me that the technology works just fine so why is Mobile Money taking so long to come to reality? Perhaps I should clarify that and say why is it taking so long in the developed markets for mobile money to become a reality, as emerging and developing markets are streets ahead.
From MPESA onwards mobile operators have been the pioneers of bringing money services to the un-banked. In fact I am pretty proud of the way the mobile operators have gone where the banks have feared to tread and provided life changing services to whole communities. Make no mistake, mobile money has changed the lives and prospects of millions of people around the world. Where banks and other financial institutions saw credit risks and bad debt, mobile operators have seen customers in need of help and have delivered beyond expectations.
More evidence of emerging markets leading the way came from mBank, a joint venture which launched nationally in the Philippines three weeks ago, between Smart and PlaNet, and claims to be the first microfinance bank to be fully based on mobile technology.
In the developed world where the vast majority have the ‘privilege’ of being banked, we are perhaps more interested in Near Field Communication (NFC) which made up the other half of this summit. Thanks to a good demo from Telecom Italia, I could use my mobile phone to open my Alfa Romeo (well, not mine but I can dream) start the engine and drive away. I like this – you know the damage that car keys can do to your pockets. I can even give permission for my son or daughter to drive the car but that’s a feature too far for me!
This was a theme expanded by the CEO of mobile money technology provider, Oberthur Technologies, Xavier Drilhon. During a good presentation he said mobile money is not the ‘killer app’ but it is probably the first app. It’s the driver and first step many of us will take before embracing the full range of future NFC services such as transport, event ticketing, and access control and loyalty schemes. I think he’s right. But why isn’t it happening all around us today? Of course it takes the building of complete eco systems across multiple industries to join up all the necessary dots and summits like this help push us a little nearer to making this happen.
Another barrier is perceived to be the security and integrity of mobile money services. This seems a bit strange to me given the inherent underlying security measures being used in mobile networks and mobile money services and when I think of the (relatively) pathetic measures involved in PC on-line banking I can’t help but to raise a smile. A very good gathering of regulators were in attendance here to find out a lot more about mobile money services and not just the security aspects. The GSMA’s Mobile Money for the Unbanked program was active behind the scenes mobilising all the movers and shakers to promote new services.
The focus of the Summit was very much around mobile services – Google and their wallet along with Apple and their Passport were not in attendance – but who cares? Their own view of a mobile money is much more self-serving and working with partners is hardly their modus operandi. So safe to say they weren’t missed in the slightest.
Is there still a lot to be done? Yes, for sure. We won’t be using our mobile phone for everything and anything just yet but it is coming together – slowly. Recognised at this Summit was the need for a greater emphasis on NFC open specifications and the need to convince merchants of the benefits to them. The GSMA is certainly doing its bit to facilitate progress but fragmentation remains the big danger.
Let’s finish on a positive note though, because this was an upbeat summit. Philippe Vallée, from Gemalto, told us that the mobile NFC market is gaining traction in several countries around the world. Vallée said there is now a growing list of countries adopting NFC technology in a big way, with Singapore, the US, Canada, UK and Italy following in the footsteps of France, Japan and South Korea. “This is moving very fast,” he said.
Good, we are all waiting!