It Pays To Explain Mobile Payments
By Mike Masnick, Fri Nov 19 01:45:00 GMT 2004

Mobile commerce is another area that has never completely lived up to the hype it generated. Do people want it, but are unable to use it -- or are they not sure what to use it for?

Ever since mobile data applications first started showing up on phones and devices, people started wondering about the commerce capabilities via phones. Some of these made more sense than others. On the less than useful side, launched a WAP application early on in the pre-historic mobile data days, that allowed people to buy books on the spot via their phones. This seemed like an odd application. How often do you need to order a book right away, but not receive it for a few days? It would seem that, if you can wait a few days for delivery, you can probably wait a few hours to buy it from the easier web interface. Other applications, obviously, have been much more useful, and many companies are working on systems like NTT DoCoMo's FeliCa to make mobile payments easier -- even if there are some questions about standards.

With all that in mind, it's likely that many people are encouraged to find out that 80% of people want to pay by phones. It sounds like a good number, but what does it mean? Not very much, actually. What are they paying for? Asking people if they want to pay for things via their phone is pretty open ended question. Are we talking about paying for content on the mobile phone? Are we talking about paying for a sandwich? Or are we talking about paying bills? All are very different types of payment. If you just ask the question "are you interested in paying for stuff via your mobile phone?" most people will answer yes -- which is apparently exactly what happened. Very few people are simply going to say no outright. They can usually think of some circumstance under which they would want to pay for something via their phone.

The second part of the study found that people currently had trouble using mobile payment mechanisms on their phones. This part is expected, since the study was done by a company trying to sell mobile payment solutions. However, again, the details are unclear and somewhat meaningless. Apparently 40% of mobile commerce users experience errors. However, it's not clear what kind of errors. Is the fault in the system? The user interface? The network connection? Also, were the payment systems that resulted in errors the same payment systems that people wanted to use in the first part of the study? Otherwise, the study is making a point by discussing two totally different things. Finally, with so many new -- and very different -- payment solutions coming to market, it's hard to make too big a deal out of any current solution.

The problem here is that "mobile payments" is simply too broad a category to make generalizations like those made in the study. The risk is that people will take those general results and start to push for mobile payment solutions without thinking through the use cases where they actually make sense. There are many situations where mobile payments will be desirable, and obviously, better tools to do so will be important. However, the real trick is in making sure that the right situations are there where a specific mobile payment make sense to the end user. There needs to be a good reason why the payment should be done via the mobile device, rather than the alternative. The issue isn't going to be whether mobile payments should be offered, but in figuring out how to offer things that people want to pay for while mobile.