Mobile Payments Whitepaper

The Application Developers Alliance have a free whitepaper on Mobile Payments (pdf) with an emphasis on the issues affecting merchants.


It offers a simple overview on the payments ecosystem and covers beacons, digital currencies, omnichannel, NFC and mobile wallets. It mentions issues such as security, fraud and market fragmentation.

GSMA Mobile Economy Report 2015

GSMAThe GSMA has a recent free report (PDF) into The Mobile Economy 2015. The 78 pages are a mine of information for any startup needing a global view of mobile. Here are a few insights I found interesting.

There’s often talk of how much (or little) money there is in devices or apps. However, how do these actually compare to each other and how do they compare to the money made by network operators? The following chart shows the World GDP split by mobile area. It shows the majority of the commerce is actually in network operators…



Another is interesting chart is the one showing commercial NFC-based payment launches over time…


I didn’t realise there were so many launches outside of Apple Pay.

Mobile Commerce Transactions, NFC and mTicketing

juniper.gifJuniper has new research that says that Mobile Commerce Transactions will Approach 200bn By 2019. If you want to be part of this, Juniper say that NFC and mTicketing are likely to be the top growth areas.

However, if you get involved with NFC and ticketing then make sure it’s secure. As Trend Micro recently demonstrated, poorly designed/implemented systems can easily be hacked. There’s probably a great business waiting to happen (or already happened) for the right company that can white-label secure NFC/mTicketing solutions.

Apple Pay Limitations

apple.gifThere’s an interesting article on USA Today Money quoting a UBS report explaining problems with Apple Pay that will limit its dominance…
  • Onerous fees charged by Apple
  • Inferior technology
  • Little incentive for merchants to adopt Apple Pay-compatible devices

More reasons then, why Apple should open up NFC before interested parties develop alternative solutions.

Looking wider, this provides learnings for any new venture. Are the fees you expect to charge reasonable in the current (and future market), can people easily circumvent your solution using other technologies and are you expecting too much of third parties to change/update their systems in order to be part of your solution? I suppose it’s really about having an old fashioned business model which is one of the stages of my primer.

The Future of Apple Pay and NFC

apple.gifI have been analysing Apple Pay to determine if it’s likely to accelerate mobile payment in general and the use of NFC. FirstPartner have an explanation how Apple Pay Works and Penrillian explain how the market isn’t open yet.

The initial implementation is US only, supports only 1.5% of US merchants, relies on the unpopular Apple Passbook and will only work on newer devices containing NFC. Hence, in the short term it won’t be used by many people. More importantly, the implementation is currently closed in that it only allows NFC payments via Apple. It isn’t possible for third parties to use NFC to build more universal, ubiquitous payment solutions. While the essential building blocks for ‘universal’ NFC-based systems across Android/iOS will soon be in place, such systems are blocked by Apple’s strategies.

NFC isn’t just about payment. It can be used in security, authentication, stock control and a myriad of contextual triggering apps, many in the growing realm of the Internet of Things (IoT). All these possibilities of using NFC are closed on iOS for now. However, I suspect that as with apps, when initially Apple said there would be no native apps and only web apps, they will have to open things up. A universal payments system is too compelling and it’s incomprehensible that Apple will stay closed in this area for so little apparent gain. The Internet of Things needs NFC as well as Bluetooth LE (iBeacons). I believe Apple will see themselves under increasing pressure from many directions to open up the NFC APIs.

Update: Adam Cohen-Rose has pointed me to an interesting article by Clover that describes how the network-side token system was proposed/implemented by the payment networks (Mastercard, Visa). There’s no reason why this couldn’t be, and probably will be, implemented on say Android. This suggests a ‘universal’ system might be viable provided it uses a similar network-side token system.

Update: In an email to Cult of Mac, an Apple spokeswoman confirmed that NFC chip on the iPhone 6 and 6 Plus is only for use with Apple Pay. Like Touch ID on the iPhone 5s, Apple is keeping its NFC restricted from developers, at least for its first year.

Update: Mark Ranta asks Where’s the Beef? and hopes Apple Pay is just the first (baby) step.

Update: Teardown shows NFC chip is from NXP.

Update: Why Apple Pay Won’t Work.  

Mobile Path to Purchase

thinkinsights.gifIf you have a physical product to sell and you want to sell it via mobile, what should you do? Should you use conventional AdWords advertising, create a mobile accessible web store or an app? In what ways do consumers search/research products and in what ways are they completing the purchase?


Google Think Insights has some new free research on the Mobile Path to Purchase. It shows that traditional search (48%) is the primary method of finding products but branded web sites (33%) and branded apps (26%) are also used. The key to purchasing conversion is proximity to store. Consumers tend to purchase in store (82%) or online (45%) with only 17% purchasing directly on the phone.

This isn’t good news for those currently working in the mobile payments space. One thing the report doesn’t cover is why only 17% purchase on the phone. Is it ease of use, security concerns or something else that is holding back consumers?

The Impact of Price on Revenue

distmo.gifAt some stage most developers offering paid apps ask themselves if they might make more money by lowering (or sometimes increasing) the price of their app. Distimo has done some interesting analysis on the impact of price drops on the iPad and iPhone app stores.

The conclusion is that price drops positively affect revenue…


My own not-so-scientific experience of this, over the last decade and a half, across several platforms, is that lowering the price from a ‘high end’ price to an ‘below average’ price has always increased revenue. However, you have to factor in the cost of all those extra users. It’s less about server side costs and more about technical support. Supporting very large numbers of users can be tricky and time consuming.

Mobile Payments, Security and Convenience

surveymonkeyblog.pngIf you are thinking of selling physical goods from within an app then you should take a look at SurveyMonkey’s latest survey of over 600 mobile phone users.

The main conclusions are that mobile still suffers from end-user security concerns, Paypal is the most well-known payment solution and people re using mobile payments mainly for convenience.

I think that, as was the case with the web, people will eventually come to trust paying by mobile. The convenience thing is interesting because many solutions currently aren’t that easy to use. Companies that are well placed to introduce simplifications and improve on the user experience will probably be the ones that have the initial successes.