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We need the iPod of payments

I felt vaguely irritated today when an analyst from a major research firm was asked to position why NFC contactless payments haven’t taken off.

He said they had analysed the worldwide global market for mobile payments, the demographics of takeup, the likelihood of using contactless payments, the audience for new forms of payments, etc, etc, and had identified a global market of just 1.8% of consumers who would be receptive to such an offer.

What complete nonsense.

The fact is that there is no ‘market’ for contactless payments, mobile payments or mobile contactless payments.

There’s just a need that is as yet unfilled.

Another person in the panel discussion said that he didn’t get NFC, and felt that “contactless is just a solution looking for a problem”.

More nonsense.

I mean, I’m sorry, but NFC contactless mobile payments are intuitively obviously going to take off at some point.

The problem is that it's in a card form right now, and not integrated into a mobile contactless form and, even if it was, there's zero places that accept NFC contactless payments (that are obvious to consumers anyway).

But this will change … we just need an Apple (in Steve Jobs lifetime of Apple) to focus upon this and make it happen.

Apple have a knack of taking solutions looking for problems and working out how to build the solution in such a way that people see what problem is being solved.

For example, in 2003 I went into a store and asked for an MP3 player.

The store manager said they used to stock them, but stopped as “who wants to download music off the internet?”

That store doesn’t exist now – it’s just a website – and the iPod decimated the music market from its launch in 2001.

Markets were redefined by a visionary taking an obvious product and making it cool.

A visionary who could see the unfulfilled need, the solution, and match the two together.

These visionaries did the same with the iPad – everyone pooh-poohed the tablet market before the iPad’s launch – and yet this was another technology that had been around for over two decades.

In other words, it takes a visionary to see a technology or technologies that are disparate and fragmented, and bring them together into an integrated whole that is blindingly obvious to those who need it and completely compelling.

That’s what is needed for NFC contactless and mobile payments.

An iPod for mobile contactless, rather than the MP3 player we have today.

The iPod for mobile contactless was rumoured to be the iPhone5 but that hasn't appeared.

Mind you, if you look at the new Android details, the iPod for payments might already be here:

Incorporating Near Field Communication (NFC), technology behind Visa's PayWave, Android Beam enables select Android devices to share videos, apps, maps, contacts and other data through slight physical contact.

So, for those who think the market for mobile contactless is zero, go and talk to the trees.

“I’m doing a (free) operating system (just a hobby, won’t be big and professional like gnu) for 386 (486) AT clones.”  Linus Torvalds, father of Linux

“There is no reason for any individual to have a computer in his home.” Ken Olsen, CEO, DEC

“I’d shut it down and give the money back to the shareholders.” Michael Dell, CEO, Dell on Apple Computers

“640k should be enough for anybody.” Bill Gates, CEO, Microsoft

“I think there is a worldwide market for maybe five computers.” Thomas J. Watson, President, IBM



About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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