Mobile payments originally might have been more centrally involved with transforming payment and banking operations and experience. But a broader emphasis on mobile commerce now promises to potentially change “shopping” in a broad sense, with a potential blurring of online and offline shopping experiences.
In fact, you might now consider “mobile payments” to be one segment of the broader “mobile commerce” business, including mobile payments at retail locations, mobile wallets for consumer identity and loyalty functions, personal finance and banking, money transfer and then marketing and incentive operations for advertisers and retailers.
At the very least, there is potential for rearranging value and hence participant revenue within all the existing legacy businesses in the retailing, banking, payments and marketing industries. The larger question is whether value, and industry revenue, grows or possibly shrinks, whether new roles are added and new industry segments are created.
If mobile commerce and payments do not grow the business, in terms of revenue for existing and new participants, then participant welfare will, in many cases, be worse than before. In other words, mobile commerce will wring revenue and profits out of the participating businesses, as the Internet has tended to do in other businesses it has transformed.
On the other hand, mobile commerce, particularly in the marketing and advertising arenas, has potential to shift revenue into mobile venues from other online or offline channels. In this scenario, participant revenues could grow, allowing new participants and roles to be created, while virtually all contestants potentially gain.
The third possibility is that aggregate participant revenue neither grows nor shrinks dramatically, strictly because of a shift to mobile commerce and payments, meaning most contestants simply “run in place.” In other words, most participants might find themselves spending money to keep what they now have, rather than growing.
Put simply, for the entire commerce ecosystem, there are basically three revenue outcomes, and two of those outcomes are negative. Since a mere shift to mobile forms of commerce does not change aggregate consumer disposable income, one has to assume that mobile commerce offers the potential to shift participant revenues, or possibly reduce friction in the shopping process.
But there is one obvious exception to that “rule.” It is entirely possible, and even likely, that revenue will shift from offline and online marketing and advertising channels into mobile marketing and promotion.
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