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We have indeed come a long way in the last few years - January also saw they 30th Birthday of the Apple Mac.

But it is much more recent developments, such as the mass adoption of in social media (Facebook is only 10 years old!) that have really driven the expectations of the mass consumer.

While this forum is read by mostly tech savvy early adopters who are keen to take on any new development, mass market adoption is key to widespread success of any new development, and archiving that relies on a number of elusive factors that are usually only seen with 20:20 hindsight.

While I agree that the future (whatever it may hold) is bright, it will be that way because it serves to make people’s lives better, and not just because it is a shiny new piece of technology.

Ketharaman,

I agree that relentless pressure of regulation and compliance poses many problems for card issuers,  but it does not prevent them from creating attractive propositions targeted to meet customer needs. Indeed the most interesting session at most conferences are usually case studies by issuers showcasing the success of their latest innovative products.

High marketing costs are usually a result of the poor conversion rates (and subsequent high churn) from over marketing such “one-size-fits-all” generic card products, rather than creating a more relevant and attractive proposition in the first place.

It is interesting to see that Barclays (not Barclaycard) are promoting  personalised photo card for their debit card customers.

Excellent blog Dominika, showing how to find the way through the minefield of multiple (often legacy) systems that many banks now find themselves with.

But we must also remember that the rationalised system must also offer the functionality and sophistication demanded by modern consumers, together with level of personalisation required to retain and grow a hard won customer base. Failing to provide that risks throwing the baby out with the bathwater.

Choosing the current “least worse” solution as the target for consolidation does not always provide the best platform for the future. Taking the opportunity to implement a new open solution that enables innovation may be seen as a bold step at such times, but in hindsight not doing so looks much more risky.

Back in the early days of mobile phones SMS messages could only be sent to phones on the SAME network and were little used.

Once the networks interconnected and people saw how easy it was to send a "Text" then SMS volumes took off exponentially, and largely replaced actual phone calls for many people.

I think that Paym (not a great name IMHO) will have the same impact on mobile payments that PayPal and PingIt have so far not quite manged to achieve. 

I agree with Alexanders assessment of the USPs:
Government-mandated (!) nationwide (!) service that uses existing KYC records (!) and Faster Payment rails (!).

Evolution or Revolution is a moot argument - mass adoption will surely follow.

Thanks for this excellent blog Jeanne.

It provides a lot of clarity to the issues surrounding prepaid in the US, and helps me make sense of the conflicting stories I have seen arise from the big players retreating and the start-ups growing.

Dave,

The hidden gem in your blog was in the second paragraph. You clearly highlighted the difference between the technology led approach and the marketing led apprpach.

NFC/Wallet, etc Vs Picture of cuddly penguin ?

Sadly neither approach will ever be sucessful in isolation.

To be truly sucessful any product must have the features the customer needs and have compelling presentataion. 

In these days of celebraty culture, X Factor and Britains Got Tallent, I propose ""Kising the Frog" as a new payment method.

It would only be for cardholder present payments of course, but with the promise of fantastic prize for the lucky winner.

Paul

I agree that innovation should not be an end in itself. To be sucessfull and worthwhile it must be accompanied by customer acceptance and adoption.

With the mutitude of choices avaiable, one of the best innovations a bank should pursue is to equip itself with a stable, reliable and flexible platform to drive its current payments products that will facilitate smaller scale innovation, where new products are configured, rather than coded, and then tested on selected customer segments.

The best way to invest in innovation is not to create a single “shiny new thing”, but to build the agility required to create sustainable competitive advantage. By building in the flexibility required, banks will have an agile solution that will allow them to move quickly and maintain a competitive position in the market, as well as benefiting from operational cost savings.

There is a constant dialogue over the future of bank branches.

The Safe Deposit Locker is probably the only banking service that requires a physical bank branch, and cannot be done online or over a mobile phone.

For those that champion branches - it could be regarded as a driver for footfall to grow business and lock in customers.

For those that preach the demise of the branch - this is the last vestige of the old fashioned way of banking.

As alwlays the truth is somewhere in the middle, but in the days of high taxation they may have a much wider appeal to the new mass affluent.

The main British high-street banks no longer offering safe deposit boxes, so perhaps this unique service is driving the growing branch network of Metro bank. 

Eric,

You have almost answered your own question - the poor consumer will regulate the number of options they actively use.

The only concern is with their purchase and choosing their good/services, and the payment method is not paramount (unless they are using finance).

They will choose the easiest payment method available, and as the statistics still show this is most often the the one that worked for them last time, either a simple card payment, or failing that cash.

It is the challenge of the industry to make the consumer feel comfortable with and trust the new payment methods, so they will choose to use them.

Alexander,

An excellent post, which clearly separates the notion of money and payments.

The other key criteria in payments, whether using real money, or electronic money is Trust. 

This is where the central bank printing presses, with fine details and watermarked paper, etc were used to deter counterfeits and establish trust in paper currency.

The cards schemes such as Visa and MasterCard built their networks based on standards and trust, recently enshrined in EMV.

Mobile payments require the same level of trust.

The secure ID is one part of it, but the backing of a trusted brand, whether the Bank of England, Visa, or M-PESA is also vital to ensure payments can me made and accepted.

Winning the battle for trust is the key to growing the volumes in mobile payments.