Framework for Mobile Payments Integration
Written By Fergal Carton
Jonas HedmanJan Damsgaard
Kay-Ti TanJ. B. McCarthy
Reviewed ByConrad FevrierPaul GriffithHeather Williams
A mobile payment is any payment where a mobile device is used to
initiate, authorize and confirm a transfer of value in return for goods and
services
Mobile payments were suggested as an alternative for micro-payments at point-of-sales systems
Other mobile and payment methods have been implemented but most have failed due to lack of penetration
Enough merchants must implement a new payment method for it to catch on with consumers; however, in order for it to be appealing to merchants a large amount of consumers need to be interested.
Chicken and Egg
Experts and companies agree that mobile phones will be turned into the new wallets
If mobile phones do become the new e-wallets, it will probably be at the expense of traditional payment methods.
Transition to mobile phone driven not smooth due to lack of support
Lack of agreement between bank and customers
The high failure rate of mobile payment solutions
Banks promote payment instruments that earn them the most revenue
Problems
Many retail banks run back office payment processing systems which use legacy development environments such as COBOL and RPG
Legacy banking systems were not designed to empower customers
Problems
Financial Institutions should consult with hardware vendors, payment solution providers and trusted service managers
What needs to be done?
The process dimension refers to what type of payment is being made, and should include the notion of customer value.
The technology dimensions describe how a payment process works and involves the integration of a number of physical and virtual payment instruments
Classifying the dimensions of mobile payments
The value dimension described as a market perspective by Ondrus et al (2005) , or as a value taker perspective by Kauffman and Walden (2001)- relates to both customer benefits and needs respectively.
The Value Dimension
The second dimension for mobile payment relates to the products, instruments or technologies through which the payment is executed.
The Integration Dimension
Evaluation of the Pilot-Project The pilot project confirmed the issues
concerning value proposition
Definition: statement or reason that summarizes why
a consumer should buy a product or use a service-In particular why would this product or service add more value i.e. better solve the problem than similar offerings.
Pilot Project Merchant agreed that the M-payment
system would be beneficial (save time).
Merchant was unwilling to pay to have the system installed at the 31 locations.
Theoretical Framework Based mainly on three works. Ondrus, J., Camponovo, G. and Pigneur, Y.
(2005), A Proposal for a Multi-perspective Analysis of the Mobile Payment Environment.
Proceedings from the International conference on mobile Business.
Kim,C., Mirsobit, M. and Lee, I. (2010), An empirical examination of factors influencing the intention to use mobile payment, Computers in Human Behavior, 26, pp. 310322.
Theoretic Framework Mallat, N. (2007), Exploring consumer
adoption of mobile payments - A qualitative study, The Journal of Strategic Information Systems, 16(4), pp. 413-432.
Theoretic Framework Lack of convincing value proposition to
customers.
mobile operators and banks focused on extracting revenue from customers.
Evaluation/Discussion
The paper was mostly well written.
There were a few minor to moderate miss-steps in the paper
Minor Miss steps Miss-wording use of the word
“connivance” instead of convenience
Definition: “Willingness to secretly allow or be involved in an
immoral or illegal act.”
Evaluation -Relevance The paper is still relevant today.
The paper is till relatively current
There exists differences in option
Relevance
Apple IPhone 5: No need for NFC today Apple Senior VP Phil Schiller said “ Passbook alone does what most customers
want and works without [replacing] existing merchant payment systems.”
It's not clear that NFC is the solution to any current problem, Schiller said. "Passbook does the kinds of things customers need today."