Business services consultancy Logica has
warned that mobile technology companies rushing to market with
poorly thought-out m-payments products could get caught in
dotcom-style bubble.
Speaking to Cards International, Jerry
Norton, chief client officer for financial services at
Logica in the UK, said that it is too early to release NFC-enabled
hardware and apps that initiate payments from handsets before
global standards have been set.
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“There are a lot of people working very hard
developing m-payment apps, and if they don’t work well, people
won’t embrace them.
“There are a lot of new initiatives, new
players and new devices in the m-payments marketplace which is
resulting in a wave of m-payments apps,” he said. “People will only
embrace them if they are secure, easy to use and most importantly
are able to interoperate.”
“Unfortunately, the history of payment
innovation is littered with failed initiatives. The problem
comes when technological capability overtakes consumer demand and
acceptance.”
Norton’s comments come two days before Apple
is due to launch its NFC-enabled iPad 2.
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By GlobalData“The iPad 2 will set the standard. But the
question is, will it be the right standard?” he asked.
“People are rushing to get things out there.
Companies are trying circumnavigate banks without appreciating how
difficult that actually is.”
Once the banks begin to take m-payments and
NFC technology on-board fully, he said, the non-payments companies
operating in the market will be at enormous risk.
“In the late 1990s we looked at companies
providing online payments solutions and found nearly 50 individual
internet-based payments solutions in the market,” he said.
“If you looked now at how many survived, I
think the number would probably be one. Many were good ideas but
the companies developing them didn’t understand how much they
needed the involvement of banks, and the same thing is happening
now in m-payments.”
