Management World: Size counts in mobile wallets

It’s not often you can find AT&T, Verizon and T-Mobile co-operating, but the mobile payment space is one area where they do, under the ISIS joint venture. The reason for this unusual cooperation, according to ISIS executive Douglas Kilgour, is scale. “If you’re going into the mobile commerce market, scale is vital,” Kilgour told a TM Forum Management World Americas keynote forum. 

“Consumers need the confidence that this is a big deal,” he said, but noted that scale was also vitally important in bringing merchants around to accepting the idea. Explaining why mobile payments is taking so long to take off, Kilgour pointed out that the last mile in mobile commerce is the retailer. “Merchants don’t like messing with the point of sale,” he explained.

When Verizon or AT&T approached retailers individually about mobile payments, retailers were not enthusiastic about going with only a single service provider, Kilgour said. If they were going to make the investment in the equipment to handle mobile payments, retailers wanted a system that would work for the majority of consumers, no matter which service provider handled their subscription.

Interestingly, service providers aren’t expecting to make money from mobile payments. “Telcos aren’t interested in payments, what we’re really talking about is loyalty, offers and engaging the consumer,” said Kilgour. “We’re  facilitating payments, not making money from it. It’s about bigger picture of mobile commerce and what people can do with their smartphone. There’s no money in it for us.”

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