Why it is Difficult to Understand Mobile Payments

Some markets are hard to understand because the concepts are new or because a particular market is intertwined with other markets that also are changing. You might argue that unified communications has been that sort of market. 

But it also appears that mobile payments is that sort of business as well. At some basic level, the value proposition is unclear. Paying using a mobile device instead of cash or a debit or credit card doesn't always have immediate resonance as something that is 10 times better than existing methods of paying for retail purchases.

But part of the uncertainty is probably because retailing is changing. "Mobile commerce" is starting to show signs of merging with the broader "e-commerce" business, which in turn is starting to show signs of merging in a bigger way with physical retailing. 

In other words, m-commerce is merely another form of e-business or e-commerce. Mobile payment is part of the broader m-commerce business. So it might ultimately be the case that the specific value of "mobile payments" is clear only when the other parts of mobile commerce also are clear. 

But there is movement. Look back a decade. What was mobile commerce, really? Ringtones, initially, then downloaded songs and wallpaper. 

But mobile commerce now is viewed as something else, namely a way to use user location and analytic data, often in real time, to enable retail sales, also often in near real time. In some ways, that builds off of e-commerce, using new devices such as smart phones and tablets. 

In other ways, mobile commerce is both an extension of e-commerce and a bridge between physical and virtual retailing. If mobile payments doesn't make absolutely blinding sense, it might be because, right now, the value isn't so great. 

The value should become clearer as the broader mobile commerce trends, and the melding of physical and virtual retailing become clear as well.