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October 30, 2017


Jim Glue

Hi Tomi,

Where we may have a miscommunication is not that "mobile wins" but that "mobile always disrupts".

Did mobile disrupt Facebook, Twitter, Ebay, Amazon? No. They all added mobile to their delivery mechanism and are thriving with mobile.

I think banks are adopting mobile, not sitting around waiting to become dinosaurs. Banks have turned mobile phones into mobile bank branches in your pocket.

Did mobile disrupt Telco's? No. It would have had Telco's not become mobile telecoms...but the mobile infrastructure is owned by the Telco's. Some parts of their money streams were disrupted, others were created or grew. So Telco's no longer (I'll speak for the USA) sell minutes. Every plan is unlimited minutes now. They used to charge for buckets of texts...they no longer do. But now they sell data, and are making more money than ever because they have evolved with mobile (of course, you could say the telco's "evolved mobile").

Take Taxi's. Mobile is enabling Uber/Lyft to be a threat to the taxi business. There is no reason that Taxi companies couldn't have responded to the opportunity of mobile much more quickly. The "ride hailing" aspect of Uber should have been invented by Taxi companies...or quickly adopted (they are coming along now). The "mobile allows Uber to turn almost anyone into a taxi driver" - is a disruptive force.

I'm just teasing out finer aspects of what type of products and services will mobile disrupt (and there is nothing that can be done to stop it), and what types of services/providers/companies will just add mobile to their delivery system.

So...cameras and music players had NO WAY to protect themselves from the disruption of camera/music playing phones. None. Even Apple wasn't able to protect the iPod from music playing phones. The camera on a phone, the music app on a phone, are direct replacements. Apple wasn't blind to what was going to occur and entered the phone business. I'm not so sure Kodak, Nikon would have been able to put out their own mobile phone platform....though perhaps they should have jumped on the Android bandwagon or at least partnered up (like Sony has).

No doubt, mobile is the computing platform of choice. Anything that can be delivered on mobile will be dominated by mobile. But that doesn't mean disruption if the "companies to be disrupted" jump on mobile.


@Jim Glue:

Good points. The taxi example in particular is interesting. Here in Germany the response of the established companies was running to the politicians and crying for help to make Uber's business model illegal and nonsense like that. Apparently they didn't even THINK about countering with something that turned their established organization into an asset.

It needs no saying that with such a response they stand no chance long term.

In any case, looking into the future I still do not see mobile as the single way to go to do payments. For once, this is such a crucial part of life that there NEEDS to be some kind of fallback - a non-technological one preferably. This cannot solely rely on a system that may fail. Today we still have cash if all other options fail so hopefully it will stay that way. Besides, why even require a device for this? Ideally this could be done with just a fingerprint with all the required information stored on some remote server that will be accessed by the payment system. Or if we absolutely need some electronic signature, why not embed some small chip into your key chain? I know lots of people who leave their house without a phone - but I do not know anyone leaving their house without their keys!

Tomi T Ahonen

Hi Winter, Timo, Phil (Oct 30)

Winter - Good example of a service doing it now, Tikkie. Thanks. (Thanks also for link later).

Timo - Great comment and example from Finland. For those not familiar with EU regulations, early on with mobile payments the EU passed some laws that restricted instant payments to a small amount (currently 25 Euros) and you could set the payment to be approved for the small amount without security checks (like to have rapid payment of a bus, train, metro ticket without needing a pin code) and of course in many cases the user could also set a separate security check/pin code limit that was even lower. There is some legislation coming that brings changes/evolution to the EU banking regulations and impacts some mobile payments stuff too. (Also thanks re Nordea later)

Phil (haha 'Timo' becomes 'Tomorrow' with predictive text... gosh what would Tomi become). As to 'age thing' most definitely the evolution towards using mobile as a payment method will have youth near the front, but also the poorest (who tend not to have full banking services, credit cards etc) and the migrants and refugees - eg the big wave of refugees into Europe right now. They'd be far faster to adopt mobile payments than a safely-employed older European dad or mom (or grand-dad or grandma)

Ok, that takes the first comments up to my first comment on Oct 30. I'll be returning with more. Please do keep the discussion going.

PS skipping ahead to Winter (from 3 Nov) haha very funny about Bitcoin and Russians and Chinese.

Tomi Ahonen :-)

Tomi T Ahonen

PS everybody

Haha this comments section is starting to be the Online Encyclopedia of Mobile Money and Payments haha as essentially all innovations in mobile payments seem to crop up in the examples..

Tomi Ahonen :-)

Tomi T Ahonen

Hi Jim (Oct 31)

Jim - first off, good comment on BBM. Just being on mobile doesn't mean you are immune from immense strategic blunders as for example how could Blackberry abandon its MASSIVE lead in the consumer instant-messaging space to Whatsapp, when BBM was the PREFERRED choice of the YOUTH (and even had a hardware portion to their business too). Just being mobile doesn't mean you will automatically win. It only means that you CANNOT win without it. It is a pre-requisite for winning but not an adequate attribute to win. You still have to do good management of your company to capitalize on that asset.

As to Starbucks and similar mobile wallets, very good point, you do need some way to charge the wallet and to withdraw money from it (if that even is possible). And behind that is usually a bank or credit card company (behind which is a bank). But it can increasingly be another non-bank but similar money transfer company like Paypal (behind which again, you need a bank or credit card company).

Where it gets interesting is if the mobile wallet can be recharged BYPASSING the banking system totally (by some entity that is similar to a bank, and may or may not have a banking licence). And this is where things like M-Pesa come in. And the ability to 'top up' a mobile wallet via the telco's charging - as invented by Habbo Hotel in Finland the teenagers' 'Second Life' type of virtual playground. Then you do have the ability to charge up the mobile wallet by some other means by a person who doesn't even legally qualify for a banking account or credit card.

If the Starbucks mobile wallet remains only serving Starbucks, then it is a poor substitute for 'money' because then we'd need to store money also into our McDonalds wallet and Pizza Hut wallet and 7-Eleven wallet and on and on and on. BUT the solution to these is what India's regulator is doing - demanding that mobile wallets become interoperable. But THAT is a big step in moving towards an integrated financial system.

Now if even one of the wallets becomes 'rechargable' via a non-banking method - then the whole SYSTEM has an alternate way to store money that essentially bypasses (and potentially disrupts) the whole banking system including credit card companies living within that system.

Then take an exit option to pull out cash from the stored value wallets...

Meanwhile if you toss in mobile top-ups then the whole system is instantly 'convertible' from cash to minutes and back. And there will be some costs of transfering money just like costs of exchanging currencies across borders - but the system gets a significant alternative method. Again, you can top up your mobile phone accounts at most modern ATMs today... so we are quite far on that route also. And there are plenty of online vendors who provide loans that then let you go to an ATM, type in some codes and withdraw the money that was just lent to you - without applying for that loan via a bank - but using the existing ATM network. There are tons of 'murky areas' here.

(Gotta rush, I'll be back)

Tomi Ahonen :-)

Jim Glue

It's always nice when we get on the same page. I can't say I'm sold on mobile replacing "money". I am sure that mobile MAY WELL disrupt the money-transaction-use-case of credit cards.

Several ways:

Merchant specific apps withdraw specifically from your bank using debits and avoids the CC charge (and all the fraud benefits of CC too). Apps give merchants far more control of and access to their customers for their own data mining purposes. Even though Starbucks only works at Starbucks and therefore isn't "money" -- you can have a BUNCH of merchant apps on your phone. I have a handful of them already. I am enticed to use them with discount offers...and to pre-order food and just show up and pay.

Store and forward services like Paypal. While Paypal gained life as an web/internet easy-purchase platform....there is no reason that can't be extended to mobile the same way merchants have custom apps. If Walmart's multi-merchant effort, CurrentC, had succeeded (it may still some time in the future)...we'd already have a multi-vendor app.

ApplePay may in the furture go direct to banks bypassing CC. Already when I purchase at Walgreens (a nationwide drug store), it defaults to using a debit instead of a credit charge when I use ApplePay.

Of course, Bitcoin is waiting in the wings. This is an actual threat to national monopolies on currency. Imagine Bitcoin (or some other) tied to any of these mobile payment-transaction type apps. I just don't know if governments will ultimately allow the general use of crypto currencies.

The rise of "paying with CC" was all the superiority for ease of payments and security of not carrying around cash. Mobile is even easier to use, and ultimately safer. It will be interesting if "protecting your purchase" and "CC eat fraud charges" aspects of using CC will save them or not. The "buy what you can't afford right now" aspect will keep CC in existence.

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