Deloitte has published a brief overview of activity in the digital wallet space on their analytics newsletter – Real Analytics. As might be expected the experts are predicting rapid adoption of mobile banking and even a significant number of mobile phone facilitated purchases – a prediction as probable as experts making predictions. They have produced a nice infographic worth sharing.
The interesting question in all this future gazing is what the shape of the relationships between the banks and carriers is going to be. Having banks and mobile telcos pairing up is a scary scenario as neither one has demonstrated much appreciation or concern about their retail consumers. The other model might include all the players – merchants, banks, telcos, and payment processors but will require a greater degree of coordination and increase transactional friction.
The one thing I’m not seeing is a lot of reaction or concern being expressed by the FCC. I’m wondering how they will view this transaction processing through the networks. When things go wrong with a mobile phone mediated transaction is the FCC going to be looked to arbitrate between the parties – merchant, bank, carrier? I’m predicting that the FCC won’t want that role as they can hardly keep up with the pace of change in telephony.
And then there is the whole issue of security and consumer protection that will have to be worked out. Banks and card issuers were able to hold vendors liable for any misuse of credit cards for online purchases – something they couldn’t do previously where a card was presented for purchases. If the data to conduct a transaction is now held in a device rather than on a magnetic strip on a card – is the consumer protected from fraudulent use or abuse?
This will all get worked out in time. Mobile transactions are going to happen and soon. It will go about as smoothly as any transition that creates major shifts in consumer behavior although much faster. Should be fun.