Kemp Little

Mobile payments — technological, contractual and regulatory convergence

Mobile payments has been heralded as a growth area in technology, retail and financial services for some time now, but given all the hype it is surprising that the mobile payments market — such as it is — is only really in its infancy and only just starting to produce workable solutions that meet consumers’ needs. There are multiple ‘mobile payments’ solutions available but few of them have yet had much traction in a way that could be described as mass market, despite the best intentions and intervention of the European legislature.

However, things do now seem to be gaining momentum. Nine of the major banks have just launched Paym, a service that allows anyone with an account at one of those banks to send money to another user of the service via a smartphone app using only the recipient’s mobile phone. Barclays pioneered the system with its Pingit app, launched in early 2012, but as excellent as the app was, and is, the concept behind Pingit has not really been able to take hold on a broader scale until now.

Although it is early days, Paym has the potential to become the big-bang moment for mobile payments in the UK — certainly as far as the banks are concerned. However, it would certainly not be right to think that the launch of Paym signifies that the game is won and over. Quite to the contrary, the mobile payments area is much bigger than this section of it: it is an area of convergence, of financial services meeting telecommunications, networks, software, consumer hardware and the full range of ways that a smartphone can collect and transmit data. As such, it is open to a whole range of new market entrants and innovative solutions that will broaden and diversify the payments sector…

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