We might relish the news that Starbucks customers are paying for their Frappuccinos with an app. The US, however, has a long way to go to catch up with the rest of the world in mobile purchases.
Mobile Payment Users by Region (1,000s)
| Region | 2009 | 2010 |
| Western Europe | 4,519 | 7,127 |
| North America | 1,905 | 3,502 |
| Asia/Pacific | 41,865 | 62,828 |
| EMEA* | 16,823 | 27,091 |
| Latin America | 5,131 | 8,010 |
| Total | 70,242 | 108,558 |
* Eastern Europe, Middle East, and Africa
(Source: Gartner, June 2010)
(Source: Gartner, June 2010)
How did this happen? How is it that the US, the world leader in e-commerce, is having so much trouble getting mobile payments into the mix? We seem to be more interested in technical and franchise squabbles than in getting products out the door. In the end, we just confuse and scare potential customers.
There are a few key lessons from the international experience that raise questions for North American mobile payment deployments:
Solve a real problem. In many emerging markets, people are more likely to have a mobile phone than a bank account. Since early 2007, Kenyans have used their mobile phones for routine transactions, including money transfers. Other parts of Africa and Asia have had similar services for even longer. The Gates Foundation is supporting mobile banking as a tool to rebuild Haiti's economy.
We have clever technical solutions at hand, with more in the queue. People, however, ultimately aren't excited about making payments with their phones; they just want a cup of coffee, a hot dog from a street vendor, and a cab ride home.
What problem are we trying to solve in North America?
Keep it simple. Mobile transactions in most countries use standard-issue feature phones. Nokia has supported all of its phones in India since 2009.How can we leverage our current technology to make mobile payments simpler?
Keep it local. Solving the problems that existed in Kenya, China, Brazil, or Japan might not help you build products and services for North American markets.What's unique in the markets in this country that could make mobile payments compelling?
Use standards. Even though we need to solve a local problem, we eventually have to plan for worldwide markets. Point solutions rarely scale unless they're based on open standards. The National Retail Federation has issued its Mobile Retail Initiative blueprint, which outlines a set of best-practices and a review of the complex standards already in play.Will the solutions that work well in Palo Alto also work in Sao Paulo or St. Petersburg (in Florida or Russia)?
Use the Gretsky Principle. Go where the puck is headed. In Kenya, telecommunications solved a problem that the banking systems couldn't fix. The obvious fix was to build out the banking system; the less obvious and more successful way was to build a mobile payment system. Kenyans solved a problem by going around it.
What non-obvious solution will get us unstuck?
Starbucks turns out to be a good example of how to apply these lessons. Its app is layered on top of its already popular loyalty card program. It lets people restore their caffeine levels with a scan of a bar code, wherever they are, because it's so easy to do. It's simple, scalable, and energizing.
— Karl Hakkarainen 
is an independent consultant who works with organizations and professionals in healthcare, law, education, and social services for whom marketing is a novel and somewhat suspect venture. He applies his 30+ years of connected communications to help them tell their stories in ways that fit within their traditions and the laws of their professions. Karl is a graduate of Amherst College and of Mount Wachusett Community College.
is an independent consultant who works with organizations and professionals in healthcare, law, education, and social services for whom marketing is a novel and somewhat suspect venture. He applies his 30+ years of connected communications to help them tell their stories in ways that fit within their traditions and the laws of their professions. Karl is a graduate of Amherst College and of Mount Wachusett Community College.The CMO Site is an executive social network that provides CMOs and other marketing executives from the world’s leading organizations with a real-time, online venue where they can convene to discuss how they're delivering on the most critical marketing priorities. Join us!
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