You should expect to hear lots of speculation about mobile commerce, mobile payments or mobile wallet efforts reaching a critical mass or tipping point in 2012, as it is the time of year for attention-grabbing predictions. What is a tipping point?
You should remain circumspect. Something big is coming. But it still is "coming," it is not going to be "here" in 2012.
The 2011 KPMG Mobile Payments Outlook, based on a survey of nearly 1,000 executives primarily in the financial services, technology, telecommunications, and retail industries globally found that 83 percent of the respondents believe that mobile payments will be mainstream within four years (by 2015).
In fact, 46 percent believe mobile payments will be mainstream within two years.
But there is room to disagree about the accuracy of those projections. One might argue that forecasts of this sort are notoriously unreliable, with respondents overestimating near term prospects.
Analysts at Gartner, for example, use a model of how expectations for significant new technologies running in a predictable cycle. What the cycle suggests is that expectations nearly always (always, according to the model) run ahead of marketplace acceptance.
What the Gartner hype cycle suggests is that expectations for mobile payments using near field communications are at a point where we can expect five to 10 years to elapse until NFC actually begins to make serious inroads as an adopted mainstream technology. The emphasis probably is important to note: “begins.”
But KPMG analysts take the opposite view, arguing that respondents are too pessimistic. “We believe that exploding smart phone growth and myriad opportunities will grow mobile payments at a much faster rate than our respondents anticipate,” said Gary Matuszak, KPMG Global Chair of the Technology, Communication and Entertainment practice.
“While KPMG believes that these forms of mobile payment will all gain some traction, our view is that mobile wallet is one of the most exciting and promising payment opportunities,” analysts say.
Mobile wallet provides the momentum to move beyond payments to participate in the entire chain of mobile commerce, from consideration and brand awareness to purchase after-sales loyalty and care,” said Tudor Aw, Technology Sector Head, KPMG Europe.
Banks, mobile service providers have key roles in mobile payment
If Gartner analysts are right about the near field communications "hype cycle," we should soon see some public "disillusionment" expressed about near term prospects for NFC. The reason is that Gartner now sees NFC at the "top" of its hype cycle, the point at which overly-optimistic projections face the reality of an extended period of development, before something "useful" actually emerges.
Internet TV, NFC payment and private cloud computing all are at what Garner calls the "Peak of Inflated Expectations," which is always followed by a period where the hype is viewed as outrunning the actual market. That suggests NFC soon will enter a phase where expectations are more measured.
In fact, Gartner now expects it will take five to 10 years before NFC is in widespread and mainstream use. Gartner's latest expectation likewise is that cloud computing and machine-to-machine applications will not be mainstream for another five to 10 years as well. Gartner's 2011 Hype Cycle
Consider some of the issues that will have to be settled before mobile commerce can reach a tipping point. First, the communication methods need to settle, whether NFC or other approaches are considered.
Carrier billing could play a crucial role in how consumers start easing into the idea of mobile commerce, but mobile service providers will have to revise traditional pricing, as a payment scheme costing more than a credit card or debit card charge will not work, especially for small ticket purchases, where carrier billing seems most germane.
Many of us believe "daily deals" are crucial, as a key source of new value for mobile wallet services that answer the question of "what's in it for me?" for both consumers and retailers. Right now, most mobile payment systems cannot provide simple answers for retailers and consumers.
Then there are all the privacy issues related to personalization and location-based targeting, which are certainly going to grow in importance. Top 7 Mobile Commerce Trends in 2011: