ThreeDimensionalPeople Why don't you go outside and play with the three dimensional people?

Mobile payments just got a whole lot easier

People often wonder why Europe and North America lag behind Asia when it coms to mobile payments.  Japan's experience with Sony's Felica system is a case in point - ubiquity of phones and vendors allowing RFID-based contactless payments for all manner of things.

Without going into too much hair-pulling detail, the answer for the West's woes is simple - too many cooks spoil the broth. Many different operators, device makers and interest groups all pushing different standards fragment the market and consumers hang back until the industry has its act together, nursing their DVD and Video format wounds.

Complicating things further, the finance industry is, together with health, one of the most regulated and bureaucratic industries, with checks and balances in place for good reasons (security, transparency) and bad (protectionism). Layer the creaky edifice of an overly protected payments ecosystem on top of the wobbly foundations of a fragmented mobile industry, and it's no surprise that mobile payments success stories haven't started to pierce the skyline.

Progress will be made in two ways. First is the greenfield approach, where a whole new user experience, business model, technology and key players are created, with the standard baked in. This is what PayPal and others have done, and Nokia's recent investment in Obopay supports another similar approach.

A second way of doing things is a bit cheekier. It says, let's just work with the messy reality of what's there today. Here Africa's Safaricom has shown us up (ie the West) by creating a parallell payments system piggy backing on the existing text messages infrastructure they already built. This solves just a piece of the puzzle - but a very important one, allowing people to send small amounts of cash to people who need it.

Another cheeky "just get it done" idea was mentioned in the New York Times yesterday. Customers of USAA bank can deposit checks to their banks by just taking a picture with their iPhone of the front and back of the check, and sending in the pic. This hit the TV morning shoes and everybody seems to have seen it - awesome marketing. This short circuits a lot of pain and aggro associated with the dead tree technology, but doesn't require very different user behavior, or all the players to agree on a common standard, since it's just one bank. But as first mover in this area, I'm sure they're getting a big spike in new users, as many people will give some credit from their mobile innovativeness to their financial management acumen.

USAA Deposits@Mobile

The long slow march to mobile payments nirvana just found a short cut.