Posted by & filed under Digital Policy, e-payment, Ecommerce, M-commerce, WI-Fi.

Description: Paying for your morning coffee and newspaper by swiping your mobile phone instead of fumbling for cash or debit card could be just around the corner.

Source: Globeandmail.com

Date: Feb 14 , 2011

The telecom companies have suffered for years from the “dumb-pipe” phenomenon whereby operators spend billions building the networks on which data travels, only to watch Google and Apple pocket the profits as smartphone and tablet computer users download millions of applications and ring up transactions.
Eye-watering amounts of money are at stake in this new market – it is estimated at $1.13-trillion (U.S.) globally by IE Market Research. One in every six phones will be equipped with the new technology by 2014, according to Jupiter Research.
But to succeed, the telecoms operators will also have to take on credit card giants Visa and MasterCard, who are pushing the technology hard as a way to boost transactions and fees.  Click here for rest of story

Questions for discussion:

  • Why do the Telco’s want to be involved in the mobile payment market?
  • What strengths to Telco’s bring to the table in this market?
  • What weaknesses to Telco’s bring to the table in this market that would preclude them from dominating this growing market?

5 Responses to “Telcos battle tech, bank titans for mobile payments”

  1. AS

    The Telco’s want to be involved in the mobile payment market because of the profit motive. They will earn profits mainly on the fees from the credit card companies and banks and not the applications itself. Therefore if they market this new wave of technology they will be able to gain a great amount of market share resulting in high profits. They believe that it would also make each brand of phone having this kind of technology more desirable compared to apple and google phones, therefore gaining a greater market share. Telco’s, being the innovators of this kind of technology and having introducing it prior to test markets will have a competitive advantage. They will be able to work out any flaws they might have before apple and google introduce their product in the market. Some weaknesses that Telco’s product might have would be that they are not a readily available name among common households. As soon as google or apple introduce their products, they will obviously take a large chunk of market share since they brand names are popular.

  2. Jolan Naismith

    Telco is doing what any successful company would do, give the people what they want and try like h**l to get it to them first. In a world where convenience and speed make you a national hero Telco is right on the money. People will love this product, but will they love it under the name Telco? Will it be cute enough? Have the appropriate accessories to create mainstream desire? Telco’s window for success will be small, how can they turn this evident weakness into a strength and draw as much as capital and popularity from this window as possible? Apple and Google will be on their heels with their already “for life” followers waiting patiently for their beloved and trusted twist on such a product. One can’t fault Telco for entering the race the potential is there but perhaps facing the facts and partnering and collaborating with one of the already highly developed giants with the majority of the market share would open a door for Telco rather than a window.

  3. Travis Sedrovic

    If Telco wants a large share of this market, they better hurry. I have heard of the possible new Iphone with the NFC chip to tie into itunes. If this happens anytime soon, Telco will be out to lunch and lose much of it’s market share. As soon as Google and Apple get this out to the market I don’t think we will hear from Telco . I agree with Jolan who said that maybe it is better to partner with the big companies rather than compete against them… I already do most of my banking from my phone, and would happily buy a blackberry App or maybe even upgrade my phone if it were to be able to actually buy things in stores and not just online. I would not, however, buy a Telco phone just for the sake of buying things, I am already happy with my blackberry!

  4. JJ

    This topic is very interesting to me especially in the world we live in where it revolves around technology. To me now a days it seems that if you aren’t using new technology and aren’t investing your time in learning the new technologies, you will be left behind. Telco has a very respectable idea and potentially it could make millions or more in the marketplace but could also be the new era for technological advancements. I would have to agree with Travis, in the aspect that google and apple already dominate the market place for this type of technological startup. I feel that Telco needs to incorporate this technology into apple, google etc. I beleive this would push the idea further and could help possibly with seeing something like this in the next phone we buy. I am all for it.

  5. N.P

    WoW! this article was pretty intense, I guess telecom can begin by targeting all those people in foreign countries such as India and Africa who do not carry visa’s or debit cards. They can also move on to anyone and everyone who has a cellphone. I personally think this is extremely dangerous since I just read the article on easy hacking. Something like this can be quick and easy but how dangerous and risky is it to have your phone so easily accessible to all of your private banking information? I don’t think I would be willing to give up that type of privacy. I’ve been to India and back a few times and the most recent time was 5 years ago. Everyone operates on a cash basis. Maybe times have changed but I don’t think this is as valuable as Telecom may think. Not to me anyways.

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