Mobile payments - Future is Mobile Wallet

1. Mobile Payments - Revolution Through Digitization
While Payment industry is seeing a major consolidation at the Banking
middleware and Back Office (payment processing, clearing and settlements)
processes, I see a great degree of disruption in the Payments origination &
instrumentation processes led by mobile devices.
This generates equal opportunity to the end-customers, banks, merchants,
merchant acquirer and IT service providers and be a part of an exciting future.
Here is my view on potential evolution of mobile payments, driven largely by
Technology and consumer behaviour, if we are able to enforce user adoption
through proper products, services, governance (Privacy and regulatory issues):-
Level-1 - Ability to use banking services over mobile - Transaction
history, fund transfer, treading, cheque deposit, chat, click to call, e-statements
etc.
It has a high degree of adoption in developed and rapidly developing economy,
also critical user base for sustainability and maturity of services can be seen.
A mature web, mobile platform with Portal, collaboration, ECM, middleware
integration(API), capabilities could help achieve this stage.
Level-2 - Ability to do commerce & services using mobile services - Pay
for services (Gym subscription, or pay movie tickets etc) or goods purchased (m-
Commerce) etc.
Ability to upsell and cross sell based on location and history of purchase for
specific brand, potentially if Banks are ready to participate in promotional
activities then cross brand sales and services are also possible.
It has high degree of adoption in developed and rapidly developing economy,
also critical user base for sustainability and maturity of services can be seen.
A mature web, mobile platform with e-commerce platform, digital marketing
(targeting, web Analytics, optimization, Social, content management), guided

2. search, ECM, BPM and middleware integration (API) capabilities should help to
achieve this stage.
Level-3 - Ability to use location and payment information to provide
value added services - Ability to assist in planning based on funding
objectives. This needs to be driven by Digital wallet (NFC) strategy (paypal,
Square, google wallet, Apple Pay or even Banks own digital wallet etc).
Banks can drive adoption of financial tracker against defined and measure
savings objectives (Standard Chartered Breeze Wishlist), if we extend this
further, banks can offer financial negotiation services where banks can negotiate
a deal with hotels and airlines for a possible holiday package, even drive co-
financing or co-development of product and services.
Also, banks could drive Reward and loyalty through merchants or card issuer and
align it to customer preference. (Visa Signature, JPMorgan Chase acquired
Bloomspot to deliver discounts for restaurants, Barclaycard has custom-made
Offers website, Foursquare is working with Visa and MasterCard to provide
location-based reward solution).
It has seen low to moderate adoption across the world. Still not driving main
stream revenues, critical user base is yet to come for sustainability and maturity
of services. This needs wider collaboration between Merchants, acquirer and
issuer and networks to drive the ecosystem to wide customer adoption. But, once
it is a part of main stream it will drive the next phase of maturity.
A mature web, mobile platform with marketing, sales and servicing platform,
digital marketing (targeting, web Analytics, optimization, Social, content
management), biometric security, Big data driven insights & predictive analytics,
intelligent BPM and middleware integration (API) capabilities should help
achieve this stage.
Level-4 - Ability to use mobile as payment advisor -Dynamically advise
consumers on the most appropriate payment solution for any particular
transaction. It knows the user's payment and loyalty cards, the balances on each
account, and the payment history associated with each. It also understands the
physical location of the user (including the retail location in which the user may

3. be standing). It could even supplement its recommendation engine based on its
lifestyle (social, travel, sports, sleeping) and habits.
Once this stage of maturity is achieved we are moving into the realm of hyper-
personalization and it is done by either the digital wallet owners or the device
owner or even to some extent the Banks. It needs to be unbiased and truly trusted
advising.
Merchants or acquirer or even banks tend to have a partial view of your financial
& personal habits which prevents them from becoming a true advisor. Whoever
controls your Digital wallet is your true advisor as it will have full context of your
financial behaviour, habits, location, lifestyle etc.
Adoption among consumers is not yet there. Walla.by started to do some parts of
it, but in my view it's just the beginning. There needs a wider collaboration
between Merchants, acquirer and issuer and networks to drive this ecosystem.
But, once it is part of main stream a true self service & customer service
capabilities will be achieved.
The technology to achieve the basic capabilities is more or less there, It will be a
combination of advanced middleware integration(API);biometric security; big-
data (Hadoop) driven advanced real time backend or in-mobile analytics for
insights, predictions and recommendation; Voice recognition and cognitive
intelligence to drive a truly virtual agent who is able to interact with you and
advise you on payments (for example a very advanced version of Siri).
Level-5 - Enabler for alternate payments business models -Once mobile
helps to achieve a payment advisor status, Analysing a segment of society and
understanding the gap in product and services will be easy. Which in turn will
drive disruptive business models to address the gaps. Starting from, how to help
drive digital banking for the unbanks or create an alternate infrastructure to P2P
lending & payments or crowd-sourced lending or m-pesa (Kenya) type services,
P2P foreign exchange, Crypto currency based services or even Interplanetary
payment services if we decide to colonise Mars!!
Whatever be the future, its going to be exciting and I am looking forward it!!