Global mobile commerce: How to distinguish between myths and reality

Here we go again. A new mania has taken hold in the technology space and more specifically in the mobile world. Whether known as mobile commerce, mobile banking, MMT, mobile money, mobile wallets or virtual wallets, the concepts are murky, but the subject is hot.

Banks, financial institutions, credit card companies, remittance companies, technology companies and most importantly, the mobile network operators themselves, are all in the game in one form or another.

Sitting among everyone are the regulators -- financial and otherwise -- promulgating new rules and regulations. The tension between the mobile operators, financial institutions and regulators will shape the evolution and defining characteristics of mobile commerce.

But as is always the case with manias, the reality is quite different than the hype and the myth.

As the CEO of one of the largest companies in the world that handles text messages between carriers -- a simple product that has seen unprecedented growth and adoption, globally -- I stand witness to the complexity of the mobile world; the near impossibility of getting carriers to agree on a universal or standard approach to a product and the impact and intrusiveness of government regulations.

Lessons Learned
Mobile commerce will mean something different to each country and to each mobile network operator. There will be no universal approach to the product, its deployment and its use even within a country. The uptake for mobile commerce solutions will be more aggressive in lesser developed economies.

Some markets will be dominated by the mobile operator, while others will be dominated by the banks. Still others will have a mix.

In China, China Mobile will likely freeze the banks out of play while they attain a financial license to transact mobile commerce.

In India, the Reserve Bank has already issued regulations prohibiting mobile operators from managing mobile commerce platforms; it must be managed through banks. In the Philippines, lax government regulations have spawned two distinct models: Smart Money and G-Cash.

Domestic, rather than international deployments will proceed at a faster pace, with a very different success profile between the two (almost all of M-Pesa’s success is its domestic traffic).

Domestic government regulations will have a massive, and possibly even a controlling impact on not only the domestic deployment of mobile commerce, but the global or cross border applications such as mobile money transfer.

What could clearly become reality is the ability of one country’s regulations to materially affect the deployment and nature of mobile commerce in another country.

As the world’s largest remitter, US. regulations will be a driving force in th global mobile money transfer market. It will be a case of comply or don’t play.

Terrorism, whether political or narcotics driven, will dictate the need for many countries to continue to monitor money-laundering activities.

As the mobile device morphs from a mere communication tool into a payment device, registration of the handset -- even a prepaid phone -- will become standard.