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A Mobile Commerce Realization in an Unlikely Place

by Dave Hannon

August 26, 2011

By Dave Hannon


Sure, it was a "reunion" show and the band, the fans, even the bartenders were, shall we say, "of a certain age." Sure, instead of staggering out of a smoke-filled cargo van, the band members rolled up in two mini-vans, with families in tow, car seats and the whole bit. But it was still the same old dark and dingy rock club and the band was still very loud, so it sort of felt like the old days. Until I saw the glow.

Out of the corner of my eye, I caught a digital light glowing, illuminating a face that was intently focused on the screen below. "Another guy texting instead of watching the concert," I thought. But upon closer inspection, he didn’t seem the texting type. Big dude, red bandana, leather vest…you know the guy. Then, I saw someone hand him a credit card. Something sinister? No, he was the t-shirt guy—he was using a card reader and an app on his iPhone to process the sale of concert shirts, taking people's email to send a receipt.

And people were BUYING. They weren't intimidated by the lack of a cash register. They weren't insisting on a printed receipt. They weren't even concerned about handing their credit card to a guy in a bandana and a leather vest in a seedy rock club.

There, in the most unlikely of places, I saw a corner turned in mobile technology.

If you had shown me a functioning iPhone 15 years ago, I would have given you that Marty McFly "time machine out of a DeLorean" kind of look. (And then I would have dumped every penny I had on Apple stock). But here we are, with big sweaty dudes in leather vests selling t-shi rts on them. The applications for mobile commerce are about to explode as consumers worldwide become more comfortable and confident in the technology. (And by the way, swap "e-commerce" for "mobile commerce" in the previous sentence and it's 1999 all over again).
In this KPMG report, an executive from PayPal says three years ago, the company did about $25 million in volume via mobile. This year, it expects to do $3 BILLION. "That growth is coming from broader adoption in the consumer base, and it’s moving very quickly into a mainstream consumer audience doing mobile payments," says Laura Chambers, Senior Director, PayPal Mobile. "Increasing smartphone penetration is one driver, but also people trying it out and becoming familiar and comfortable with the process."

And sure it's one thing for middle-aged rock fans to buy into this, but when the masses in China, India, and even Africa buy in, look out. According to a recent survey from GfK Group, 82% of Chinese consumers found the idea of mobile payment appealing, while France found it the least appealing. In fact, adoption of mobile payment will likely be slower in the U.S. and Western Europe because we already have established payment methods like debit card readers.

So when will the explosion happen? The KPMG survey says more than 70% of companies surveyed say that mobile payments are either very important today or will be important in the future, with the vast majority saying that the market is in its infancy. Less than 10% say mobile payment is mainstream today. "Nearly three-quarters of companies expect solutions to move into the mainstream within two to four years," the report says.

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