Mobile payments success needs complete ecosystem

Arrighetti: the process of eliminating cash is under way

The public is ready to adopt mobile payments in many aspects of their lives, but service providers need to have a defined role in the ecosystem and an understanding of how they interact with other players and the consumer.

Marco Tarantola of Banca Nazionale dei Lavoro told delegates at a conference in Milan that his bank was rolling out mobile payments to all its customers following the success of a pilot project.

“There is a great interest and desire to use mobile payments, but it is essential to find other uses,” he said. “We need to define a larger ecosystem of added-value services for e-wallets and we need to define what is included in that.”

Tarantola said that it is also essential that rules are put in place so that new entrants and incumbent providers, such as banks, have a level playing field.

He was speaking as part of a session on mobile payments at SIA Expo 2013, the annual conference organised by the Italian financial infrastructure provider SIA, which as been testing an NFC payments hub in conjunction with banks and telcos, allowing consumers to make contactless payments in a variety of situations, including shops, taxis and public services.

“The results of the experiments over the past year with various banks and Telcos confirm that mobile payments arouse great interest and can change behaviour and habits,” said Massimo Arrighetti, chief executive of SIA. “The gradual process of eliminating cash is under way, also due to the new generations of users, and the mobile phone can certainly make an enormous contribution to the development of new payment methods and other services useful in our daily lives. However, it is necessary to create real situations in which to use them and to promote collaboration among all the players involved.”

A study among the trial users showed that 94% of them were satisfied or very satisfied with their experience, said Professor Renato Mannheimer, founder of ISPO Richerche, which conducted the research.

Mannheimer said that the users were generally quite conservative, making on average just four payments each month, generally for amounts less than €25. He found surprising differences between the sexes, however: “Men tended to make repetitive payments – a newspaper and coffee each morning – while the women were more experimental, even buying furniture at IKEA,” he said. Overall, use is mainly at supermarkets or shopping malls (71%), followed by restaurants (44%), bars, news stands and tobacconists (29%).

Echoing Tarantola’s point about the need for a larger ecosystem, he said that the biggest problem that users reported was the difficulty of finding somewhere to use their cards. “There is widespread enthusiasm, but there are still problems with merchants,” he said. “Despite this, the experiment has been successful.”

The need for service providers to understand their role also provides an opportunity for them to revise their processes. Discussing the role of mobile payments in the public sector, Marco di Capua, deputy commissioner of the Italian Revenue Service, said that a suggested role for fighting tax evasion was improbable, but there are other opportunities. “We need to identify specific advantages – I can’t imagine people paying taxes with their phone because the amounts are greater and you are talking about more structured information associated with the actual payment,” he said.

In other areas, such as health care, it may make sense to link mobile payments to individuals and restructure the way that they are able to report allowable expenses, such as by making the existing forms compatible with smartphones and tablets. “It is interesting to see that even the Revenue can contribute to this: we have a complicated tax system – the state and local authorities are willing to eliminate this complexity, saving money and boosting transparency.”