The Emperor without clothes

This is something about the Mobile banking and payment (MB&P - I have decided to acronymise this term now, because I use it such a lot) industry. We have more than our fair share of people and companies that make claims that is so far removed from what is possible and also what they are obviously capable of. This is possibly because such a lot of people have turned MB&P into something romantic - the next big thing...

One of the best know examples of a nude emperor were of course Simpay. While this organisation were busy with grand schemes in Europe, many were modeling their strategies on what Simpay was supposed to deliver. Many millions of dollars were spent on this grand plan that most of the industry was expecting to come true. I recall companies that were basing their whole product strategy on the assumption that Simpay would have dictated the standards for mobile payments. Yet for a lot of us (especially those that were intimately involved with the industry), we did not see any clothes. We did say so, but not too loudly, because others were looking strange at us.

There are other examples, I believe. Some with grand plans and ever more spectacular visions. Who will be brave enough to name them this time round. Well, let me give you a clue: A nude emperor this time round have a name that starts with F and have just been acquired by a company with a name that starts with Q.

What do you think?

A perspective on Mobile Payments in Europe

Europe’s venture into mobile banking is characterised by many small initiatives that all failed. A case in point is the example of small Dutch company Global Payways with a product called Moxmo launched during 2003 with a mild take-up in the Netherlands. During the collapse of Paybox, Global Payways acquired the subscriber base of Paybox in Germany. This small company was soon in financial difficulties and had to disband services within six months of having taken over the larger subscription base. (Many reference, but read the following blog.)

Soon afterwards major mobile operators announced the Simpay alliance. Simpay endeavoured to provide a common payment platform between Vodafone, T-systems, Telefonica and Orange. While the European industry waited, Simpay had the central stage for three years and produced… nothing. This fiasco had a lasting impact on the European mobile payment industry.

A company that is quite visible at the moment is a company called Monitise. An initiative started by Morse with a Java based service on top of the ATM network is now being deployed by 1^st Direct, HSBC and Alliance & Leicester. The company is very visible (because of a large marketing budget?) and is making big headway from a brand building perspective, but the technology offer little functionality to the subscriber. Recently Monitise listed on the LSE raising a substantial amount to fund the current burn-rate. Another company with a similar profile is the Finnish company called Meridea. With backing from Nokia and Accenture this company was the technology behind amongst others Standard Chartered mobile banking initiative. Unfortunately it closed its doors a few months ago when they ran out of funds.

A noteworthy deployment is the mobile payment solution supported by Banksys in Belgium. Banksys is the central ATM and POS switching company owned by the major banks. Banksys recently announced a SIM card based solution supported by all the major mobile operators that allows subscribers to make payments from their existing bank cards utilising the mobile phone.

The deployment of Paybox in Austria is still operational today and very successful. The service is available on more than one network, provides excellent functionality and utility and is used by close to half a million people on a regular basis. (This is quite a big coverage considering the size of Vienna where most of the subscriber services are available). The service is claimed to be profitable and is one of the best examples of a mobile payment solution that ultimately became successful because of dedication of management.