Wednesday, October 21, 2009

New types of mobile based payments by mainstream banks

We have seen it in the past: a mainstream bank attempting to launch a mobile payment or an innovative payment solution. These attempts usually ended in the "did not work" folder and life carried on. This is why mainstream banks wait for standards to evolve. By launching a product conforming to an industry standard, the bank can be assured of interoperability, conformance to regulations and a clear definition of liability(and how to manage risk).

However, it seems as if this may be something of the past, with a number of proprietary mobile payments and wallets being launched by mainstream banks with very little consideration for standards. It is almost as if the banks are saying: "We have waited long enough for these standards to emerge..." and now we are going to do what is needed. And I am impressed with what they produce.

I was exposed to the mobile wallet solution being offered by Rabobank in the Netherlands last week and was really impressed with the way that the team have worked on integrating different aspects of remote payments, SMS order entry and proximity payments. The solution is called MiniTix and may indicate a way forward for mainstream banks (Read here).

Of course one can reference many other initiatives. For instance the Mowaly wallet from Standard Bank recently launched in South Africa (Read here), the tie-up between Deutche Bank and Luup and many initiatives that one can refer to in the US. (for instance Boku (Read here) and the Starbucks wallet (Many references, but read here). Maybe it is time for mainstream banks to stop waiting for standards and start delivering solutions in this space.

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