Framework for Mobile Payments Integration. Reviewed By Conrad Fevrier Paul Griffith Heather Williams. Written By Fergal Carton Jonas Hedman Jan Damsgaard Kay-Ti Tan J. B. McCarthy. A mobile payment is any payment where a mobile device is used to initiate, authorize and confirm
Reviewed By Conrad Fevrier Paul Griffith Heather Williams Written By Fergal Carton Jonas Hedman Jan Damsgaard Kay-Ti Tan J. B. McCarthy
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
Chicken and Egg 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.
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.
Problems 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
What needs to be done? Financial Institutions should consult with hardware vendors, payment solution providers and trusted service managers
Classifying the dimensions of mobile payments 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
The Value Dimension 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.
Nature of the goods, Where the payment is being made, Who is involved?? B2C B2B P2P P2NP G2C
The Integration Dimension The second dimension for mobile payment relates to the products, instruments or technologies through which the payment is executed.
Initial Framework for Mobile Integration
Methodology Theoretical Framework Pilot Project
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.
Validity -Three Aspects Logical coherence Theoretical relevance Relative explanatory power
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.”
Minor Miss-steps Use of un-cited statistics 25-30% of Bank Revenues 900 Billion dollars
Evaluation -Relevance The paper is still relevant today. The paper is till relatively current There exists differences in option
Relevance Today Apple IPhone 5
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."
Conclusion The proper integration of mobile payment has its challenges