Digital identification and mobile payments

The fundamental problem with all payment systems is to accurately verify the identification of the buyer. If one can be hundred percent sure that the identification of the buyer is absolutely accurate, one can be hundred percent sure that the payment is not fraudulent. In the physical world this is achieved by verifying physical documentation (for instance ID documents, fingerprints etc.). The problem is of course much more difficult in the digital world.

That is why solving digital identification is almost the same as building a fraud-proof digital payment system. This is emphasised by a recent announcement from Paypal (Read here). In this announcement, Paypal aims to become the custodian for their clients' digital ID's. Similarly, deploying well-designed mobile payment solutions in emerging markets is similar to rolling out robust identification systems. One should consider combining both problems: rolling our national ID systems at the same time as deploying mobile payment systems.

Very positive surveys for Mobile Banking

It is all good and well to talk about a trend based on trivial observations or individual war stories, but trends get substantiated by rigorous research only. That is why one can now confidently proclaim that there is a spectacular growth in the adoption and potential for mobile banking. This is true on the basis of a number of research reports released in the past few months that all corroborate this trend.

Some of the more interesting reports that I have seen are:

• Javeline Strategy and Research reporting a jump of almost 60% in mobile banking take-up, concluding that mobile banking has now moved from a "nice-to-have" to a "must-have". (Read here)
• A McKinsey research poll of major European banks report a jump of more than 50% in banks that are planning to launch some mobile banking application (Read here).
• A Comscore research reports a jump of 45% on a year to year basis of consumers using mobile banking. This now represent about 14% of all mobile users in the US (Read here).
• Both Starbucks (reporting 20 million mobile transactions) and Paypal (expecting $3.5 billion of mobile transactions in 2011) reporting strong growth in their mobile banking initiatives (Read here)

Good news for the industry.