January 27, 2015
Have you ever thought that if you are from Germany or India and you have your own mobile wallets in your country that you use and then you came to the states for a trip and none of your wallets worked... How much would it 'hurt'? Many people would have already experienced the issue but they don't mind it. We expect many things won't work when you travel abroad. But the millennials are not expecting the same. Many business travelers are also expecting that we could solve the issue. Maybe have a Global Mobile Wallet or maybe have the wallets auto-magically work on each other's rail.
Maybe 'hurt' is a strong word for many people that are not like me. Maybe you will feel as if you are going back in time when your mobile wallet doesn't work abroad. You will feel that while people around you are using Venmo and Dwolla, you are still stuck with 'cash' and credit cards. Worst of all, attendants at POS are swiping your Chip and Pin card for transactions :)And just to be clear, I am not talking about online or digital wallets (so don't think Paypal). I am talking about the problem with Mobile Wallets for international proximity payments.
But my Cellphone works everywhere?
I travel to U.S. very often. I have a permanent US cell number. It's so easy for me to just land there and put my US SIM card in my iPhone and 'boom' it works. It works all the time and I can change my plan online, even before traveling and coming to USA. Why it's so easy? Because there are international standards - GSM, 4G and others that all carriers and phone manufacturers follow. From chips burned into phones to cell towers around you anywhere in the world - they follow those standards. Many people on business trips just use their home country SIM card and number and use it in U.S. easily. I mean, you don't even have to enter a username or password when you log in to another network (btw, it happens automagically). But when it comes to 'Mobile Payments' there are no standards!Paytm works in India, SEQR/Wywallet works in Sweden, Venmo works in USA. It's a problem to be solved right there (entrepreneurs?)
Visa and MasterCard rails
When many people and retailers blame Visa and MasterCard for interchange, cartel and many other things what we forget is that they did a very nice thing. They set the standards for card payments (in a way). You could carry a card issued by a bank in Timbuktu and swipe it in Bangalore or Miami if it was a Visa or MasterCard.
There is very similar opportunity for players across countries to collaborate in mobile payments and make them work globally. Imagine you are signed up with Westpac/Coles mobile wallet in Australia (app-server model or Contactless) and you come to U.S. and without worrying you can experience the same payment process that you are comfortable with and is there with you in your phone. With globalization and increased travel it just seems to me a problem waiting to be solved. Ofcourse you have to involve retailers but that could be through a standards route. A standard that Apple Pay will have to follow and a walmart and a bank in Asia and a mobile payment system in UK will have to follow. Maybe I am thinking about a payments infrastructure built from scratch for enabling mobile payments anywhere in the world.
But right now we cannot do that. So we might be pretty much at level 0 or 0.5 of global mobile payments explosion.
I also wanted to share some of the following experience I had which might not be truly exceptions:* as I hold US credit and debit cards, I was able to use them to activate Apple Pay and use it during the last two weeks that I was in the USA* I was also able to use Uber app because I use it all the time outside US also and the whole thing worked* it doesn't hold true for my Starbucks card though. They are country specific cards being closed loop
Why I stress upon the universal availability of mobile wallets that work across the globe while cards and cash are already there? Apart from the obvious advantages of digital/mobile money there are two problems with cards and cash:* You have to buy local currency (go to an agent or ask your office) and pay the currency exchange commissions etc. before travelling to USA. Not to mention the charges you will pay if you withdraw cash in the USA* in the case of cards when you are swiping a foreign bank issued card at a merchant place in the USA you will incur additional charges that you would not know there and then (you would have to wait for your CC statement from your issuing bank).
I am not sure if the currency exchange charges could be eliminated by mobile payments (hello Experts, remittance guys?) but the ease of use and anytime availability could do the job for me. If a Western Union or Xoom came up with a global mobile wallet cum remittance product which reduces my foreign currency exchange charges that will be super cool. If I could use it for proximity payments anywhere that will be the ideal solution. Facebook could do it as well (especially with David Marcus there +Paypal and Stripe on their side) but we know they are not doing a payment product right now. There are atleast 2 strong players thinking on these lines...(ahem! lets leave it at that for now).
I am sure I am not the only guy that needs this solution. When I landed in New York and on my second day of this trip we took a cab to go to Javits center, and my partner paid with Apple Pay in the yellow cab, I knew this is the experience we all wanted from our mobile wallets. When will Apple Pay come to Asia? How about Venmo and Google Wallet and Level Up? Why are these guys not thinking global? India and China are not emerging countries anymore. We have 'emerged' and when we have every device and product available back there (that we can bring to USA and it works) why can't we PAY in the same way.
Let's Talk about it. I would like to hear your opinion (use comments below)
- written on a Lufthansa plane (hotspot) on iPhone 6 plus