Mobile payments veteran sees massive interest in mobile commerce
While the United States mobile commerce ecosystem still lags behind Asia and even Europe, it is catching up quickly as various players prepare for mobile payments to ramp up significantly.
Todd Ablowitz, who already serves on the Board of Directors for the Electronic Transactions Association, has just been appointed to mobile payments company Billing Revolution’s Board of Advisors. Mobile Commerce Daily’s Dan Butcher interviewed Mr. Ablowitz, a former executive at contactless mobile payments company Vivotech Inc. and current president of global payments consulting firm Double Diamond Group, about the trends and market demands he is seeing in the mobile payments space.
Here is what he had to say:
What is the current state of the mobile payments/mobile commerce industry in the U.S.?
The U.S. market is clearly in the early stages of a massive growth trend in mobile payments. I see three main areas of mobile payments/commerce activities in varying states: remote mobile payments, mobile point of sale (POS) and contactless/NFC mobile payments.
Remote mobile payments are actually quite far along in the lifecycle. Today, digital content is responsible for the most substantial part of transaction volume and it will continue its rapid growth.
There are several areas that will quickly add to transaction growth including remote purchases such as tickets and memberships, followed by growth in goods and other services that are purchased over the air via the mobile phone.
In parallel, mobile POS is outpacing growth of traditional fixed POS, and face-to-face mobile payments using technologies like NFC are being prepared for commercialization.
As part of NFC’s precommercialization, we’re seeing an explosion of sticker-based contactless solutions coming out. It will be very interesting to see how those products affect the speed of NFC’s rollout, and how much traction they can gain.
Remote mobile payments
Pros: Available now, no issuance of cards or “chicken versus egg,” can work within the existing payment systems, strong, scalable value proposition
Cons: Some types of face-to-face transactions are not ideal for this payment method
Pros: Good user experience for face-to-face transactions, works within the existing payment systems.
Cons: Cost of the stickers, pace of issuing, lack of ubiquitous acceptance.
Pros: Good user experience for face-to-face transactions, capacity for new types of consumer interactions with merchants.
Cons: Complexity of a multi-party ecosystem rollout, lack of ubiquitous acceptance, cost of phone upgrades.
How does the U.S. market compare to other markets worldwide?
It’s well known that markets such as Japan and Korea have far more mobile payments experience than the U.S. Throughout Asia there are substantial mobile commerce activities. I continue to see Asia Pacific and European markets showing strong technology leadership and the U.S. will eventually adopt some of those technologies.
What barriers remain to mass-market adoption of mobile payments/mobile commerce in the U.S.?
The sheer size of the U.S. market, combined with the fragmented nature of payments players, leads to unique payment rollouts in the U.S.—always much more slowly compared to more vertically integrated, smaller markets. That’s why we have seen higher adoption to this point in countries like Japan and Korea.
However, while this is a particular challenge to any solution that requires both issuance and acceptance adoption, the U.S. also has by far the largest number of credit and debit card accounts worldwide.
So, solutions that leverage the card that’s already in the consumer’s wallet, requires no changes to their handset and no POS system modifications will be able to gain substantial and immediate traction.
What trends are you currently noticing in the space?
Beyond the product categories and updates I mentioned above (remote payments, mobile POS and contactless/NFC/stickers), interest in the mobile commerce sector in general has increased significantly.
There are almost daily product and/or company announcements in the mobile payments space, and there is massive interest from the investment community. Not a day goes by that I don’t see activity from the investor community.
In the payments world, everyone wants to know what I can do “now” to capitalize on mobile payments. Billing Revolution offers those companies a solution that can give immediate exposure into mobile payments by leveraging today’s technology.
Why did you decide to sign on as an advisor to Billing Revolution?
I work with some of the largest and most successful companies in the payments world. Every one of them asks me, “What can I do to make money on mobile payments ‘now’?” In an industry as complex and slow-moving as payments, we have learned that the best solutions are those that are both simple and precise in their value proposition.
When I was introduced to Billing Revolution I thought, “Wow. I can’t believe no one has come up with this sooner.” In my eyes, that is exactly a recipe for a successful product.
Billing Revolution is an excellent solution because its remote mobile payments approach can scale based on the existing credit and debit cards in people’s wallets without major infrastructure development. The more I investigated, the more I liked their solution.
With Billing Revolution, once the user enters their credit card number, they become “single-click enabled” and it’s literally a single click to make future purchases from any Billing Revolution customer. Consumers get it, merchants get it, and importantly, payments companies get it.
What is your mandate?
My company and background is focused on the payments industry. I advise on domain expertise, strategy, payments knowledge and my industry connections to help Billing Revolution partner with the world of payments providers to grow their business.