Entrepreneurs like tipping-points. Their sources are many and varied; a spur from technology perhaps, the first time you say 'no' to business you don't need or a little change in the behaviour of a few starting to make a big difference in the ways of many. And the question people are asking at the moment is 'have we reached a tipping-point in mobile money?'
Ubiquity, immediacy, bank-grade security and utility all play a part in making consumers increasingly active in using financial services via mobile. Mobile money is about the supreme convenience now available for the two billion-plus people who have bank accounts and access to financial services, and for the two billion-plus who don't.
Mobile banking has proven its value. Our independent research has shown that UK consumers with mobile money apps check their accounts on average 16 times a month - three times as often as those who log in to internet banking.
Still, mobile banking alone was never going to be enough to push forward the entire mobile money industry. Squeezing an internet banking experience onto a mobile screen simply doesn't cut it, as people expect ever more functions, slickness and speed, and interoperability with other mobile-supporting platforms.
Growth and dynamism
What's clear is that we are in the midst of a fast-growing and dynamically innovative industry as three factors align: explosive growth in mobile data, convergence of mobile banking and mobile payments, and the rise of mobile commerce.
We have had our false dawns and our peak of inflated expectations. We recall the early days of the internet and the initial trough of disillusionment with WAP banking.
But now the tangible indicators for the arrival of the mobile money tipping point are there.
Crucial to success though, is interoperability. Before Link came along in the UK you used to have to find your own bank's ATM, even though you might live next-door to another bank's machine. Link made the process interoperable and the ATM network is now unimaginable without it. If consumers are chained to only one brand there will never be ubiquity. I remain sceptical that any single bank or single operator point solution or closed-loop approach will succeed in mobile money. You must have interoperability, which is at the heart of Monetise's approach.
The past reminds us that the unprecedented growth we see in the mobile industry is playing out in different ways across platforms, handsets, applications, operating systems and international markets.
Near field communication (NFC) is one example of this. While this technology opens up the possibility of tapping or waving a mobile to pay for goods, trials have still yet to trigger mass commercial rollouts. Challenges remain, not least around the complexity for service providers such as banks, mobile network operators and retailers of supporting a range of devices, with integrated bank-grade security applications.
Consumers want holistic service
As we have found in developing apps for our financial institution partners, banks have realised that separate banking, payments and commerce apps are not the answer. This drive to provide the infrastructure or 'lay the rails', as it were, for a holistic, trusted and secure consumer experience (with seamless mobile money services that include account management, remote payments, P2P, loyalty, offers and authentication) has been integral to global strategy at Monitise.
What is evident is that we are moving closer to a mobile wallet becoming the 'connector to connections' across banking, payments and commerce. The ecosystem for all this is evolving rapidly. Google's Eric Schmidt recently singled out the development of mobile money as key to the company's strategic priorities in 2011. In 2010, consumers bought and sold more than $2bn (£1.24bn) worth of merchandise on eBay via mobile, up from $600m in 2009. Last summer, Amazon's Jeff Bezos noted that in the previous year, consumers had ordered more than $1bn in products from the company using a mobile device. The 2012 Olympics in London will fuel new ways of connecting consumers via mobile.
Major industry players are migrating their services to the middle ground to capture commerce as they realise the opportunity from mobilising their business. There are now four big networked communities - payments and banking, mobile operators and OEMs, retailers and merchants, and social networking and online advertising sites.
They realise that if they can play their part in the convergence between mobile phones and financial services, they have access to a really big space, a vibrant ecosystem, fanning the flames of opportunity. Add in the regulatory pressure on banks and the need for new transactional revenues and annuity streams from their customers and mobile payments move rapidly up the agenda. This is not simply about a cost migration play or launching a 'me too' application.
The next two years will be dominated by the formation of larger alliances, deeper ecosystems between big partners across financial services, retail, mobile and social media. I believe that by 2013 there will be an explosion in mobile money driven by connected commerce.
Alastair Lukies is Chief Executive of Monitise, a UK plc delivering mobile banking and payments globally by connecting financial institutions, retailers, payment processors and mobile operators to their consumers.