KPMG in Canada believes that mobile payments will be mainstream in closer to two years time and that much will change between now and then – with outcomes dependent on how the new value chain is defined and the roles of each player. Driving these changes is a consumer base that is increasingly comfortable with the use of mobile technologies. KPMG’s Consumer and Convergence 2010 study showed privacy and security to be the top issue hindering acceptance, but our Mobile Payments Outlook 2011 shows that ease of use and convenience are now the top driving factors, with privacy and security moving down to third.
A huge impact on the “ease of use and convenience” factors will be the recommendations of the Taskforce for the Payments System Review in Canada and ultimately the regulations that will be imposed by the government on each stakeholder and the payments infrastructure overall. In addition to any considerations regarding compliance, companies will need to address privacy and data security concerns as well as to understand the impact on their business strategy and operations, accounting (revenue assurance, attestation) and tax exposures.
What does all this mean for financial services sector? Banks have been busy; some are getting ahead of customer demands by developing and deploying innovative mobile solutions with an eye towards gaining market share and driving new sources of revenues. Others, however, are waiting for standards to be set and for customer demand to hit critical mass. One thing is for certain, those who wish to drive forward now will need to develop appropriate governance procedures within a marketplace that is still maturing in order to take advantage of opportunities across the value-chain.
For retailers, much of the road ahead is unknown – fraught with questions as to how the technologies allow them to better connect with their customers, what the costs will be, how else can the technologies be used, what kind of data might they have access to, and how to ensure they are compliant and transparent with their privacy and security policies.
This is an exciting and dynamic area with many varied possibilities as to how it will ultimately take shape. Communications and technology companies are constantly innovating and we expect to see further developments in this area, along with perhaps a few new disruptive technologies.