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Banks should address mcommerce now and contactless payments later: Study

April 27, 2010

contactless-paymentsBanks that are pushing to promote contactless payment technology are focusing on the wrong target and should switch their short-term focus to mcommerce, according to Ovum. 

According to the “Mcommerce: Seizing the Immediate Opportunity to Build for the Future” report, mcommerce is set to experience a renewed interest with several industry players. Ovum finds that mcommerce presents financial institutions with a golden opportunity that they should not miss.

“There has been a big wave of noise around contactless payments and that’s what we heard so much about for the past two years,” said Alex Kwiatkowski, principal analyst of financial services technology at Ovum, London.

“What we see is a bit of resetting of reality,” he said. “We think that with mobile commerce, there are no barriers to using the mobile device for payment purchase.

“We think there’s too much concentration on the wrong target.”

Ovum provides clients with independent and objective analysis that lets them make business and technology decisions.

Benefits of mcommerce
According to Ovum, retailers are anxious to reap the benefits of mcommerce to drive revenues.

Carriers want to increase the use of data services to halt declining annual revenues.

In addition, the company believes mcommerce can act as the foundation layer for other mobile payment mechanisms and instead of being overshadowed by Near Field Communications, it can be a catalyst for future use of contactless services.

According to the study, with the rise of interest for a mobile payment instrument, mcommerce will be central to the future evolution of mobile payments.

“Banks have been studiously indifferent to mobile payments,” Mr. Kwiatkowski said. “There’s a much greater desire amongst the banks now, whereas in the past there has not been.
“I think marketers should not wait for some magical technological ingredient before they market services through mcommerce,” he said.

Future mobile payments
Mr. Kwiatkowski said that companies should take into consideration that although many consumers are tech-savvy and may have the most up-to-date mobile devices, others carry older versions of handsets on them.

Companies should take into consideration that mcommerce does not have to be a device-specific experience.
“My biggest prediction, if we’re going to see a world of contactless payments, there needs to be a catalyst,” Mr. Kwiatkowski said. “There needs to be a sense of giving a comfort factor to consumers.

“I need to get used to using a different device and not just reaching for my wallet,” he said. “It’s something that is going to give me a greater confidence.”

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Rimma Kats is associate editor on Mobile Commerce Daily and Mobile Marketer. Reach her at

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