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One
of the reasons to create or attend events such as the Mobile Payments
Conference, held by Mobile Marketing & Technology, is the
unexpected. So what was unexpected? For me, a couple of things.We
expected to hear about revenue opportunities for firms creating payment
systems, providing loyalty programs, marketing and promotion services.
But here’s one angle on revenue models I hadn’t expected to be
confronted with.
If you run a smaller and existing company, you
are thinking about ways to leverage what you already do in the emerging
mobile payments and wallet spaces. If you are a start-up, you are
evangelizing, hoping to create a new space in the payments ecosystem.
Larger
firms have several options. Like Starbucks, they can strike out on
their own, with a proprietary offer that provides immediate business
benefit, but has no wider ecosystem ambitions. Like Visa, MasterCard,
American Express, PayPal, Isis or Google, some will create platforms
that can be used by many partners.
But there is one strategy I
hadn’t really been thinking about. Some larger firms do not want to
invest now to create a substantial payments or wallet business that
integrates enough value in enough segments of the value chain to
represent a platform.
In part, the reason is that it doesn’t make
sense to bother starting from scratch when what is needed is a sizable
position from the start. Generally, that means waiting for somebody else
to create a usable platform, possibly including all the key payment and
wallet functions, and then get enough traction to generate $100 million
a year in revenues.
The problem is that such firms do not yet
exist. You can assume that Visa, MasterCard, PayPal, American Express,
Isis and Google are not for sale. That means some other entities will,
at some point, amalgamate a full platform, in some cases working with
those named partners, and create recurring revenue streams of $100
million annually, or more.
At that point, some firms will step in
and buy those entities as their way of getting into the mobile payments
and mobile wallet businesses. So aside from innovating in one or two
segments of the complete value chain, some firms will begin to integrate
enough value that they represent platforms. Some of those firms will
start to generate the $100 million revenue volume some buyers are
waiting for. And then the acquisitions will start.
The point is
that some larger entities haven’t said anything yet because they have to
wait for suitable acquisition targets to develop, and they don’t see
those opportunities at the moment.
The other unexpected
development was provided by Sean Kane, Pillsbury Winthrop Shaw Pittman
partner. We invited Sean to speak on the advice of Amanda Moskowitz, NYC
Mobile Forum organizer, and it was very good advice.
Sean talked
about the regulatory perils of what might be called “virtual currency,”
but which Kane said should always be called points, credits, tokens or
some other name that does not imply it is “money.” The reason is simply
that anything that looks and feels like “money” is going to be regulated
the way all other businesses and functions using “money” wind up being
regulated.
Of course, that got us thinking. There is another
potential business case, namely the use of virtual currency, precisely
to gain the advantage of money substitutes that can be exchanged for
money.
Where in a gaming scenario a provider might to ensure that
money comes in, but doesn’t go out, in other scenarios a service or
application might well be willing to put up with monetary regulation in
order to allow putting money in and taking money out of an application.
Why
do we think that is interesting? As our interest in mobile marketing
and promotion lead us to mobile payments, wallet and commerce, so our
interest in mobile commerce leads to virtual currency. That’s an
unexpected, unplanned “learning” that in all likelihood would not have
happened without the serendipity of the meeting.
That’s why we do these things. There are “aha!” moments that occur at meetings that do not occur otherwise. Read More back to top 
Mobile advertising is growing really fast, at a 75-percent rate, between
2009 and 2010, followed by social media with a 32-percent growth rate
over the same period, but from a very-low base. Television advertising
continues to claim the greatest share of advertising spending, and had
11-percent growth between 2009 and 2010.
Read More back to top
www.mobilemarketingandtechnology.com
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