Mobile payment system will require 'significant infrastructure investment,' says Ovum
Financial services institutions will need to make "significant infrastructure investment," particularly in value-added services if the mobile payment market is to take off, observed research firm Ovum.
In addition, banks will need a better understanding of the relationship between mobile payments and the existing payment infrastructure in order to benefit from the long-term potential of the market, the research firm judged.
Firms are looking to value-added services, such as targeted advertising, loyalty services, couponing and tracking, to generate revenues form mobile payments.
"The level of hyperbole and confusion in the market is increasing. Many existing payment providers and potential new entrants are unsure of how to proceed in an industry that is evolving almost daily," said Gilles Ubaghs, senior analyst for financial services technology at Ovum.
"It is critical that the growing number of businesses, vendors, and service providers gain a better, and more balanced, understanding of the nature of these developments, and how they are impacting and being impacted by existing payments infrastructure," Ubaghs added.
Mobile banking is currently a greater investment priority for banks than mobile payments. Yet, mobile banking is adding mobile payment functions to mobile banking, such as peer-to-peer and proximity-based contactless payment services.
"The market is now progressing in several directions simultaneously and existing payment providers need to remain agile and flexible as mobile payment trends develop. The opportunities for mobile payments are significant in all markets, but they will only be achievable through integration with existing payments infrastructure and processes," Ubaghs concluded.
- see Ovum's release