As consumers, our mobile devices are used to pay for different services but mainly mobile content. There are different models that enable people to perform micro-payments to non mobile related products and services using their phone (via premium SMS or Premium calls). These payment methods are very expensive in comparison to a magnetic card for example. The fact that these are such an expensive methods caused that it is almost impossible to get a sustainable business model based on these payment methods. As a result, mobile payment is well familiar to people but it doesn’t mean they use it for things outside the mobile experience and habitat.
In specific markets we do see some interesting solutions but these are usually limited to a specific geography as they require a lot of infrastructure and of course an active engagement from the operators and usually the device manufacturers. The dominant solution in this category is the i-mode felica in Japan which is based on an 13.56 MHz RFID in the NFC standard (later models only).
Research firm Gartner had concluded that at the end of  the year there will be 74.4 million mobile payment users, and that it will exceed the 190 million users, almost 3 percent of the mobile phone user base.
190 million users are yet to by categorized as a mainstream product, who are those that use mobile payments?
First we must  remark that mobile payments are not related to mobile content, although carriers are deeply involved.
Mobile payments been used widely in developing countries where ATM, banks and credit cards can not be found easily,  opposed to mobile devices.
That seems to be the reason why mobile payments are so popular in China, and Africa with an estimated 100 million Chinese will be using mobile payments by the end of 2009.
But Mobile payments are often  used as  complementary payment method for example at a drink machine or for buying movie tickets.
When money is part of the picture everyone wants to take part, the carriers, the banks and transaction companies that are taking there coupons.

Becoming a mainstream service is seemed to be far  in the future but two recent developments are evidence that proves that this day is soon to come. It is required to say that many of the mobile payment companies (including several Israeli start-ups) started with a big investment and with a big buzz only to close the doors of the companies several years later.
First is Boku , the company that raised 15 million dollars and purchased two competitors named  Paymo and MobillCash (which shows how many failed companies are for sale for ridiculous amounts).
Secondly is Accells a new Israeli start-up company that have developed a mini transmitter that  is placed in a store, parking place etc, users do not have to install any software, and there is no need for NFC or RFID chip to make a purchase.

The interesting part is the “behind the scenes” battle between the banks, e-commerce companies like PayPal and credit card companies that want to keep managing our banking accounts and the carriers that are looking for new ways to make money, becoming a credit card company is not too bad for their financial reports after all. In Japan, the different players combined their forces and created a service that was a cooperation between the bank, the credit card company, and the mobile operator.

The concept of paying with your phone is very nice but the customer needs an incentive to move from using a credit card to using a mobile. Nokia’s reports show that people forget more their wallet than their mobile phone that in most parts of the world is one of the three things a person carries in his pockets. So availability is not a big differentiators and incentive (the wallet is also available). Mobile payment technology and solution providers need to find that factor that will push the use in mobile payment forward or we are doomed to write many more articles about mobile payment and nice concepts and technologies but with no significant success.

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