Last week, an EU commission finally gave the green light to mobile payment schemes in the UK. ‘Project Oscar’ will see a consortium of operators (Telefónica, Vodafone and Everything Everywhere) launch a digital wallet scheme, however, this new business initiative is not restricted to mobile operators. By launching branded mobile services, financial institutions can enable mobile payments directly to their own customers. This is the view of Mark Ashdown, CEO of Cognatel, a UK based company that provides third party brands with the technology and strategic consultancy that enables them to launch and sustain their own mobile services.
Traditionally, mobile wallet schemes were most viable in emerging markets, with companies such as Western Union heavily focusing their efforts in developing regions such as Africa. Concerns with reliability have delayed the progress of mobile money in the UK, but the EU commission’s actions underline the fact that the mobile money market has matured. Recently, the economics and the understanding of virtual mobile services have fundamentally changed, opening up the mobile network business model to a wide range of brands, including financial services and banks.
Project Oscar will see Near Field Communication (NFC) used to enable mobile financial transactions, and financial institutions will all be vying to capitalise on the introduction of the digital wallet scheme. But rather than working in tandem with mobile operators, financial services should now look to launch their own mobile networks, enabling mobile financial transactions, whilst also retaining full control of the subscriber base. Project Oscar will only enable small scale mobile financial transactions, as operators lack a banking license. In launching their own mobile services, financial institutions can cut operators out, and maximise their mobile money offerings, delivering real service value to the consumer.
Ashdown believes that, in order to succeed in this endeavour, financial institutions must ensure that they go above and beyond simply reselling mobile tariffs, by offering subscribers opportunities that money can’t buy. For instance, banks and financial institutions could leverage their sponsorship of other brands, such as the Premier League (Barclays) or the London Olympics (Visa), offering their customers exclusive experiences with these sponsored brands.