Mobile payments is so hot right now, it burns

I said that I had been chairing a conference on payments last week.

The conference is the International Payments Summit, one of my annual favourites.

It now has quite a wide ranging remit, from SEPA and European payments through all things electronic to mobile.

With more time, I would write up every session, as there was so much to discuss but, with limited time, here’s the headlines.

MOBILE.

MOBILE.

MOBILE.

Yep, everything was about mobile payments, which has truly come of age.

Mobile in treasury, mobile in payments infrastructures, mobile in retail, mobile in cars ... mobile here, there and everywhere.

That’s the thing about mobile stuff – it’s ubiquitous.

There were some discussions and contentions about the importance of mobile however.

Some said it’s not that important and was just another hype cycle, whilst others said it’s a core upheaval in the world where we live and cannot be ignored.

Some said that Mobile Network Operators (MNO) don’t see this as that important, and they bore fruit when they asked how many MNO’s were in the room and only one person raised a hand.  I wondered how many banks attended the Mobile World Congress?

Vocalink talked about their research, which shows a compelling value proposition for mobile combined with immediate payment via their fast payments service.

VISA talked about their strategy for mobile:

Whilst banks like Rabobank showed such services in action:

The European Payments Council talked about their latest developments for the Cards Framework and, when asked if they were concerned about mobile replacing cards, said that it would be no problem as all of the Framework is now cloud-based and therefore card independent.

Brilliant!  A Cards Framework that needs no cards!

Barclays talked about Pingit, which had 20,000 downloads in its first two days of launch, and the fact that this was developing into a corporate app to displace paper by linking mobile to QR codes.

PayPal talked about the fact that there would be $7 billion of mobile payments forecast for 2012, up from $4 billion in 2011 whilst iDEAL, the Dutch  bank created PayPal alternative, showed their strategic plans and included the use of NFC contactless and QR codes via mobile as part of their presentation.

Royal Bank of Scotland picked on firms like PayNearMe:

to illustrate how mobile shakes things up whilst Jibun Bank of Japan, a mobile only bank, talked about their $3.5 billion in assets built since launch  in 2008 whilst Brett King presented Movenbank, a new mobile only bank being launched later this year.

All in all, the theme of IPS2012 was definitely mobile.

So how should banks deal with this?

Possibly the nail was hit on the head by Eric Tak of ING, who compared the mobile hype to a gold rush.

In a gold rush, you can be a gold digger, but that has high risks of failure to go with its high rewards.

Alternatively, you can be a supplier to the gold digger. 

The suppliers were the brothels, bars, jean makers, blacksmiths and horse grooms, who all made money providing services to the gold diggers. 

They had low risk and were also rewarded well for their service and, for a bank, the best role is to be a supplier to the mobile diggers.

You can make up your own mind as to whether that is the best strategy or ...