Though some might scoff at the notion that applications, such as contactless payments in transportation or parking, or wallet applications such as “time to refill your prescription” notifications using text messaging that every mobile device can receive, are “trivial,” such applications are important, for a number of reasons, says Diarmuid Mallon, Sybase 365 head of product marketing.
For starters, applications that are not drop-dead simple, widely available and which do not provide “obvious” and immediate value will not be adopted quickly or broadly. Given growing fragmentation in both the mobile payments and mobile wallet spaces, that is an important issue.
Traction in the marketplace now matters, and simple apps that provide clear value, and ideally, new value, will get traction.
You might consider mobile payments for parking an example of a relatively trivial application. Eliminating the need for cash is “always is a good thing,” says Mallon.
But it is the features no other payment method provides that might ultimately be key. Telecom Austria supports a mobile payment service for parking meters with an important new value.
“Ten minutes before your time expires, you get a text message and you can use text messaging to add more time on the meter,” says Mallon. “Nobody needs to be sold on that.” All other methods require physically going to the meter to deposit additional funds.
That new value answers the question some have about mobile payments in a retail setting as well, namely that mobile payments do not necessarily provide much new value in retail settings in developed markets.
In that regard, Mallon argues, “remote payments” for purchases made to a vendor that a user is not standing in front of might have more success, near term, than “proximity payments” such as contactless payments inside a retail outlet.
Remote payments, made from a distance, without the payer and payee being present at the same physical location, are characteristic of online commerce, purchases of virtual or digital goods. So, in essence, mobile remote payments simply extend remote payments from an operation conducted by PC or an automated terminal, to operations initiated directly from a mobile device.
That now includes operations that make more sense when made from a smartphone or feature phone and those that make more sense when conducted using a tablet device. “Some payment apps don’t work as well when people are walking around,” says Mallon. In those cases, the mobile arguably is the better platform. On the other hand, tablets work quite well, perhaps offering a better user experience, in those instances where the user is sitting down and not moving around.
The other reason “apparently trivial” payment operations are important is that they create new habits. In that regard, the “best” scenarios are payment operations that occur frequently.
A frequent and repeatable payment situation not only creates a new habit, but justifies the effort of using the app. One can think of many other mobile payment scenarios, but some of them might happen too infrequently to be worth bothering with. Small value transactions that occur frequently are good candidates for a mobile payment solution.
Concert tickets aren’t bought often enough to be a great candidate for a highly-used mobile payment app. “Transport tickets, gasoline purchases, vending machines and taxi fares” are much better venues, says Mallon.
The other important point is that, in many scenarios, the payment itself is not the challenge. “It’s all the extra value” wrapped around payments, says Mallon. Loyalty, coupons and vouchers can add value. In the case of the parking fee payment using SMS, it is the remote payment and the notification that is the value add.
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Edited by Brooke Neuman