Mobile News

The need for partnership is quite clear–risk must be shared, opportunity must be maximised and time to revenue must be minimised. Yet the prospect of mature portal-driven financial services is compromised by the uniqueness of the mobile internet model whereby revenue generation between partners is less certain than for the fixed internet–for example advertising is less suited to the limited screen size of the handset. In the PC-based environment, ISP/portal companies generate revenue from access, advertising and e-commerce while for m-commerce players the prime concern is to remain within the value chain rather than generate revenue immediately. As content and services are enhanced, banks should be able to charge a recurrent incremental fee based on network access of content. Furthermore, portal providers (banks/operators/fixed internet players) could negotiate a `bounty fee’ for each new customer introduced to m-commerce partners.

Although banks are often dismissed as precisely the type of slow-to-adapt institution ill-suited to developing the mobile channel, it is worth noting that the trust and confidence conferred by banks over many years contrasts favourably with the typical mobile operator’s churn rate. In addition, telcos have no track record of entering the financial services market–the risks associated with banking and competition within the credit card industry militate against the notion that operators could usurp the role of banks due to their micropayments infrastructure. The experience of the fixed internet has alerted banks to the need to partner, while the rise of internet-only banks in conjunction with ongoing mergers and acquisitions denotes a sector fluid enough to leverage its traditional strengths within mobile payments. Mobile banking services form only an initial part of the evolution towards full value-added services–the pressure is on the operators who are expected to evolve into mobile ISPs. The addition of core banking services to the mobile internet does not yet entail channel substitution, rather it acknowledges current device/ delivery limitations while extolling the virtues of multi-channel service delivery for banks. Furthermore, the importance of the smart card industry, regardless of payment solution model, is central to the development of both the operator SIM and the banking chip–this also supports the need for partnerships as the major enabler for financial services on the mobile channel.