A high level analysis of Mobile Payment Services.
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Correct me if I am wrong.
When trying to gain user mileage, I think it’s the composition of subscriber base that matters rather than its magnitude.
A majority of mobile users in India are of `prepaid’ category ( self employed people like Electricians, Painters, Plumbers, Carpenters, Drivers, Masons etc.who use it only to receive calls from clients ) who wouldn’t know how to text a message. For them M-Payment option is a bit far fetched which involve sending / receiving text messages. This is a specimen case where `reach’ does not mean `the entire subscriber base’.
The minority would find Credit Cards user friendly and it would significantly be more economical any day.
Security is not just a matter of technology — its a business model issue, and a credibility issue. The current providers of payment services have handled both those aspects, even as technology continues to evolve. There is a nominal liability to the customer on credit card frauds, and there are very well respected/trusted names behind those services — replicating some of these on the mobile front might be the key to adoption. Perhaps one of the reasons why people dont like using debit cards,
On the current pain point issue — I think the biggest one is reach — there are still too few credit card users in a country like India — the reason mobile platform is interesting is that it can potentially reach a lot more people.
Hi all,
“It’s going to create customer churn by creating an image that carriers don’t have a “secure network”.”
Having worked in the credit card industry for approx. 2 years now I think the problem of secure network is there too. Obviously there has to be fraud reduction methods. ( using data modeling etc ). and you have to manage the risk of letting through a transaction etc.
One solution I can think of is :-
1. User A goes to Merchant B and buys stuff.
2. User A pays for the stuff through issuing a coupon ( this coupon can have some stamp which authenticates that its from and only from user A ) and transferring this coupon to merchant B over “Blue Tooth”.
3. Limited to “Blue tooth” handsets only.
4. Fraud chances are less. ( Sim card have to be copied to create those stamps ).
Someone closer to mobile techologies might give good comments on this solution.
What is that PPP trying to convey ?
I could agree with Ashok entirely in that M-payments are not trying to solve any existing problem. Since you’ve to text messages, it introduces an additional process. That way, it is more cumbersome than credit cards / traditional banking. At best it could be used for last mile delivery to a remote unbanked customer segment in a micorfinance environment.
M-Commerce can create a huge problem for not just the end user, the enterprise or the consumer, but for the carrier as well. For example, when fraudulent charges appear on your bill, the first person you are going to be calling is the carrier. That’s going to drive up the carrier’s support costs; they’re going to have to spend more time on customer care.
It’s going to create customer churn by creating an image that carriers don’t have a “secure network”. All this will drive up transaction cost and user will soon opt out of it – rendering the entire infrastructure created keeping her in mind, wasteful.
We also hear about the mobile payment types of viruses in the open operating systems platforms. Though the operating system can be secure, but it’s really the user’s data and the user’s information that sits on top of that, and the applications that they’re using, which are at risk.
If the user happens to be low end, less savvy about the rigors, they can be easily victimised by crooks (when the user seeks help) triggering defaults, spate of lawsuits, consumer action etc.
Dear Ashish,
When one has to say “End customer’s take away : Not Much”, shouldn’t one realize that one is trying to find a solution for a problem which does not exist ?
(not even a lateral need)
Lets consider the current solutions to current users and why would they change to mobile payment.
I mean, do you think ppl who are not comfortable with credit cards would be comfortable with mobile payments ? (I have my reservations..)
And for ppl who are comfortable with credit card payments, what is the take away in changing to mobile payments ?
Just want to carry forward the discussion.
I guess it would really great if we do a analysis of the need (or lack of) here ?
IMHO, there might be a specific customer profile which would really benefit from such service but that would come out only if there is brainstorming.
would like to hear other’s views..