Mobile Innovation
“The problem with NFC is its fast but not fast enough, TFL evaluated it and its milliseconds instead of microseconds. There are merchants it makes sense for like EAT and Prêt a Manger who hit the lunchtime guys and have people cramming through the stores but very few people are using it.
“ISIS has the same challenges, a solution looking for a problem that is primed to be a marketing platform. If you recall the launch of ISIS they claimed to replace Visa and MasterCard but when they did their research they decided they didn’t want to do that at all!”
Being able to spot faults within current offerings has now positioned Roy as a highly demanded expert amongst mobile services start-ups. One of Roy’s current commitments is acting as
board advisor for MyOrder, a
mobile commerce platform that allows you to pre-order food or drinks from a restaurant without having to wait for a waiter to come to your table. The Netherlands start-up has now been purchased by Rabobank and foresees global expansion within the next few years. What advice did Roy have for other mobile service start-ups?
“I tell the entrepreneurs that I speak to that they need to find their eBay. What
I mean by that is PayPal doesn’t exist without eBay – PayPal existed because you had a world where people just got through the excitement of an auction and then all of a sudden they went into these old payment systems that were so slow and PayPal changed that.
“The reason that is vital is because there are people who want to be paid and people who want to get paid. Merchants won’t sign up if there are no buyers and buyers won’t sign up if there are no merchants. In terms of mobile wallets, there is no reason for me to sign up to a new wallet if I can’t use it anywhere and vice versa. Merchants won’t integrate with a new way to pay if there are no buyers.
“To be successful in mobile payments you need two things – density and frequency. Density between merchants and buyers in terms of being in the same place at the same time and frequency because if it’s a one-off
I
won’t sign up to anything, but if I am doing it a lot then I will sign up.
“Then it’s about finding environments where this happens. A university campus is a great example and so is transport. The reason payments fail and don’t have the adoption people expect is because they have this shotgun approach, they throw
NFC readers all over London and merchants complain that they only get a few transactions a week because there is no density and frequency. It’s the same with the buyers; people with contactless Barclay cards can’t find enough places to use them.
“In fact, that’s the secret of Square. They are aware of density and frequency and they are going to the two places that you spend the most time at; your office and your home.”
What else could limit the advance of mobile payment technology and more importantly, the amount of people who get on board and use the system on their smart phones? Roy tells me that cultural behaviour is a huge factor. “People are still frightened of their phone breaking or the battery dying because more and more of our lives are now integrated into our phones” he says. “Smart phones are now hubs for our lives and we are addicted. We have become highly information-sensitive creatures and we want information fast.
“All mobile payment system providers trying to break through need to take these factors into account.”
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