Wednesday, June 08, 2011

Taking location out of the payment process

In the early days of mobile payments, I found the mobile payment application for parking in Estonia interesting (Read here). Paying for parking the way that I am used to, was always location-dependent... and still is where I live. You could only pay for your parking when you were actually, physically present at the parking space. Now, with mobile payments, location is taken out of the equation. The payer could be different to the parker and could be anywhere in the world!

Another implication of taking location-dependency out of the payment process, is that the role of payer and buyer can now be separated. It is not necessary now to send money (or a cheque) with the buyer as one could authorise a payment without having to be present.

The impact on business process and implication related to risks and disputes must be analysed carefully in order to unlock the real benefits. It is not possible to deploy everything immediately, but it is important to at least consider the implications. When thinking about mobile payment applications, it is worthwhile to break the paradigm that it is necessary that the payer should be present at the location where the transaction occurs.

2 comments:

Scottiebales said...

I agree with you Hannes. But mobile also presents the opportunity to use location as a part of the service. For example, paying for goods via mobile may involve a decision leg that verifies your located at or near the seller, hence decreasing the risk of fraud in card not present transactions in the past, or card skiming.

Tony Vargas said...

I agree with you both as you each present solid cases of the possibilities created by the portability of mobile payments. Good piece!