Excellent piece here reminds us of the pre dot-com promise of mobile payments, when the banks and others figured they had it figured out, with P2P and P2B paments.

MobileRadicals Blog » Mobile Payment – Six years after WAP

One of the appealing things to me in the early days of WAP was how it was going to change the way we paid for goods and services. No more queuing for cinema tickets, I’d just fire up my WAP browser and buy them online, and they’d be ready for me to collect when I got there. Similar kinds of things were touted with a range of different services but few materialised.

 The article talks about the appeal of the single device that holds your virtual wallet, and permits you to access the account/ payment vehicle of choice through your WAP phone.  It goes on to talk about how Smart Cards have had that capability for decades, so what held this up?

Smartcards that have been available for decades have had the capability to store more than one payment method on them, yet this functionality in the main is unused; why would competing banks want to share their card and hence their space for branding with a competitor? So whilst having more than one payment method per card may happen, it is sure to be only if they are both from the same bank.

Ah .. so its this pesky banks again apparently!

So, it looks like credit cards have the market wrapped up. There is little room in the payments marketplace when there are two extremely large companies who dominate with little reason to innovate or rock the boat. However, payments on the web offer us a ray of hope and perhaps suggest how the next generation of mobile payment will develop.

It goes on to talk about failed dot-com companies, such as Beenz in the UK that specialised in Micropayments; small amounts such as 5p to read an article.  They failed, but …

From the ashes of failed payment systems like Beenz a behemoth has risen in the form of PayPal. Now owned by auction giant eBay, PayPal has changed the way of payments online and has become the only really successful alternative payment method.

He hits on why Paypal succeeded:

Of course, looking at this more closely, we can see that it has achieved this by making credit cards easier to use online; vendors don’t need an expensive merchant account with a bank

Here is the meat of the article, and unfortunately it stops there just when it was getting interesting.  Paypal succeeded by providing credit card access, and the credit card companies lived with that, because they thought they were safe.  But this is the classic trojan horse – now they are inside the castle, they can begin to attack at night (pardon the metaphor).  Ebay are already down that slope by focussing on payments through only Paypal.  It wouldn’t be hard to insist that funds have to be in Paypal to cover payments next ……

However this still doesn’t give us mobile payments.  Do we have to wait for a MasterCard phone?  Surely someone (Bank) is going to get it, and figure out this mammoth opportunity, by putting customers before credit card branding.