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« Kill your television | Main | Credit, debit, prepaid »

I wonder if mobile phones will really catch on?

By davebirch posted Apr 11 2007 at 1:34 PM

[Dave Birch] Yet mobile money launches.  KushCash is one, another is AT&T.  They are planning a a “single front door” format for full service mobile banking.  Apparently this means that banking will work the same way as e-mail and instant-messaging services, where AT&T provides a user interface that offers access to a number of different Internet service providers.  So instead of a number of applications from different banks having to be tested, configured and so on, there will just be one AT&T banking application and it can connect to multiple banks.  An AT&T person said that although banks might be reluctant to put their brand and services up next to those of competitors, the single interface would help prevent market fragmentation.  I'm still not sure if I would want to use this kind of application, but then I'm probablynot the target market because I'm happy banking on the web.  What's important is s, as Hannes van Rensburg says, that mobile banking is enabling people who never had access to electronic banking before.  Internet banking enabled people to access their banking electronically only if they had been banked before, whereas mobile banking is leading to a revolution where people are being banked who never had a banking relationship in the past. This is largely because of the utility and functionality that is now being made available to people with cell-phones (which is much more than people with access to the Internet)However, the biggest difference is the access that mobile banking have enabled especially to people that never had access to electronic banking before. Internet banking enabled people to access their banking electronically only if they had been banked before, whereas mobile banking is leading to a revolution where people are being banked who never had a banking relationship in the past.

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I was looking for an old paper for reasons not germane to this particular subject and I came across the proceedings of "Mobile Phones and Electronic Commerce" organised by IBC in September 1997.  It was mildly interesting to flick through the presentations ten years on, particularly the stuff about the Cellnet / Barclaycard phone.  There were some quotes about it selling 20,000 handsets in 6 weeks.  I believe the figures because they came from Tom Alexander.  We were working for Tom at the time, doing some feasibility work on electronic payments.  I don't recall the ins and outs, but I do remember that the Mondex e-purse was a focus of particular interest, but it came up against a brick wall: you couldn't just put Mondex purses into the SIMs, you had to get a bank to issue them.  And none of them would: I expect they were waiting see whether this mobile phone thing would catch on or not.  Tom was always very forward-looking: he eventually left Cellnet to set up Virgin Mobile, the first UK MVNO.  Needless to say, he doesn't have to work anymore.

The Cellnet "blue button" Barclaycard phone later morphed into the two-slot phone (a Motorola Startac) that you could put your chip (UKIS) Barclaycard into and, much more importantly, worked with VisaCash. I always loved the logical purity of the two-slot phones and I was very disappointed when they faded away.  But now they're back!  Instead of a slot, they have NFC, but the idea (and the benefits) are the same: let the telco do telco stuff, let the bank do card stuff.  Of course, the card is going to disappear inside the phone soon, but it will still be the banks' application.

I wonder if the first contactless prepaid debit product will be launched on a commercially-available NFC handsets in the UK by 22nd September 2007 (hint: no).  If it is, then it will only be 10 years after the delegates at this conference were discussing such a thing. There's a nice piece from Kevin Duffey, then at Logica, about a vision of phone with all of the functionality of an ATM (including e-cash withdrawal) being launched within 18 months.  In the end, it's taken nearly a decade to get the UK banks on board with this -- MoniLink started in 2006 -- and we still don't have e-cash but it is, at last, in sight.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]


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Dave, I love your retrospectives. They really put things into perspective.

Great article and thanks for the mention!

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