Mobile Payments, Checks, and “The Lying Twins”

Industry leaders and strategists: we need to stop planning for mobile to be the  second coming of electronic payments, because mobile payments is here now. Once we accept that truism as reality, the data and strategic next steps come into clearer focus.

We’ve lived far too long with what I call the lying twins:

  • One day, paper will suddenly decline from the payments stream
  • One day, mobile will suddenly replace plastic or paper payments

Folks, it just doesn’t happen that way. My observation is that methods of payment exchange rarely change rapidly unless marketplace forces change. Credit cards have been around since the 1800’s (I know, I own one), and it wasn’t until well after the market changed (with individuals moving between increasingly urban centers via a new national highway system) that credit cards boomed in the early 60’s. PayPal was hoping for success in their third model when an unprecedented new market was created for online auctions.

I see some industry executives hoping that in-person mobile payments at point-of-sale will be the next BankAmericard or PayPal, but the data doesn’t suggest that we bet on instantaneous change. Rather, it suggests that we’ll see plastic cards move into phones in a way that will one day resemble the reverse of what’s happening with checks: gradual change, driven by market and generational shifts.

History supports my assertion, and further it suggests that many of today’s plans need to be readjusted to reflect this reality. If this is true, than success favors those who have the advantage of patience and a factual perspective. Thankfully, there’s a way forward in terms of factually understanding the behaviors and attitudes of young people whose payments, mobile and financial services preferences that are entirely different than those of the typical Gen X or Baby Boomer industry leader.

In my next blog, I’ll elaborate on how Gen Y can teach the rest of us about the future of mobile payments (the one that’s here now).

It’s late, it’s a rare May rainy California day, I’ve been putting off a wet ride home and I have a large-denomination paper check that I can’t afford to get soaked (because my bank hasn’t offered me mobile payments…I mean mobile remote deposit yet).

Category: Dynamic Payments, Mobile, Omnichannel Financial Services


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