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The Obsession with Mobile

Silicon Valley is abuzz. The rise in seed stage valuations has people wondering whether we are in another bubble. Investors are clamoring about cloud computing, whispering about Google’s Dropbox killer, and wondering if Box is actually worried at all by these turn of events. In the grand scheme of things, all these points of discussion circle around one grand theme. It is an important development, one that has changed consumer behavior unconditionally.

I am talking about none other than the obsession with mobile.

About a year ago I started this blog. Back then, my foray into mobile hinged around payments. I was particularly interested in the rise of NFC, arguing that it was the most exciting development in that field. In my opinion,  I believed that NFC could change payments by making transactions more seamless and convenient. However, I warned that the technology would not gain any traction unless the card networks pushed it forward. I concluded, “As long as  card networks decide to be tenuous in their efforts to make mobile the go-to method for processing payments, and while we wait for NFC to become more wildly adopted, the window of opportunity remains small for companies not already established in the payment space.”

So while I was busy trying to figure out how NFC would take off, I seemed to have naively missed the most important question: does mobile payments even solve a problem?

According to Jordan Crook from TechCrunch, it does not. “Where mobile payments are concerned, there is no problem to be solved.” He makes a convincing argument by discrediting the need to make credit cards transactions even more convenient than they already are. His strongest point, however, has to do with his analysis regarding the future of NFC. Tech journalists and entrepreneurs have insisted that NFC is 5 to 10 years away. Whether that is correct or not cannot be ascertained anytime soon. But Crook says that by the time NFC does gain traction (whether it’s wihtin that time frame or not, it does not matter), another technology will have replaced it and made it irrelevant.

Crook’s piece is clear and optimistic. Clear in the sense that his step by step analysis of NFC’s relevance to mobile payments is easy to follow. Optimistic in the sense that he implies that if mobile payments is to ever solve a problem (that apparently hasn’t arisen yet), there will be a technology more innovative enough to solve it.

I do, however, have to disagree with his belief that mobile payments is irrelevant. I will admit that I have grown more skeptical over the last year of the redeeming characteristics of NFC. That does not mean that mobile payments is simply a fad. At this point I might have to retract some of my thoughts, but now I think that NFC may be trying too eagerly to erase credit cards by incorporating them into mobile devices. Des Moines based start-up Dwolla might be taking the more pragmatic approach by bundling and optimizing credit cards. As Pandodaily reported, “A single Visa-branded Wallaby card will link to all existing cards and dynamically rout transactions based on preferences for things like rewards, miles, interest rate optimization, and savings. Wallaby does not extend its own lines of credit or even checking or debit accounts. The company simply offers a cloud-based digital wallet tied to a single smart payment card.” In other words, if a user has an iphone enabled by a Dwolla mobile app, that person can engage in different transactions without having to worry which credit card is being charged: it’s already taken care of, because Dwolla has made transactions adhere to “each user’s personal preferences and objectives, while being frictionless and simple.”

To me, Dwolla’s foray into mobile payments tells me that innovation can faciliate credit card transactions. I’m still convinced that there’s a problem to be solved. How it will be done, I do not know, but I am confident that it can.

This last train of thought has led me into another direction. The fact that we are talking about a Dwolla mobile app rather than a desktop app is telling of the shift in consumer behavior. Mobile apps, or simply pieces of software that we can access on our phones, are dominating the way we play games, interact, and organize our lives. As VC Fred Wilson wrote, there seems to be a paradigm shift to “mobile first, web second.” While web services are “flatlining”, mobile services are expanding rapidly. Chris Dixon (co-founder of Hunch) went further and said that the saying should be “offline first, mobile enabled.” In other words, the first exciting trend surrounding apps has to do with the move from the desktop to the mobile device. The next trend, the one that Dixon believes to be even more exciting, has to do with mobile app’s potential to improve our day-to-day lives. He concluded, “The really massive opportunity is dreaming up new ways that the little computers loaded with sensors that we carry around with us everywhere can improve our real-world experiences.”

That’s the million dollar question, isn’t it? There are millions of apps, but how many actually make a meaningful difference in our lives? And even if there were apps that have already been coded and are functional, how do we access them–how do we find them? (see Apple’s acquisition of Chomp, Facebook’s release of a new app store, Appsfire…more on that later)

I think mobile is exciting right now simply because the mega trends within the space have–for a lack of a better word– mega implications. SaaS is increasingly focusing on mobile as the centerpiece of their strategy moving forward. Mobile security is the new hot spot for security companies such as McAfee and Symantec. As workers increasingly bring their own devices to work, how can companies secure their employees’ data all while complying with compliance standards AND not infringing on their privacy? This is called the ‘bring your own device’ dilemma, and it has internet security companies scrambling around building proprietary technology and/or buying up smaller start-ups.

And if we are going to expand from the minute details to the larger macro vision, let’s look at the global implications of mobile apps. Think of the possibilities in Third World. Countries in Africa and India are going to leapfrog technological milestones that developed countries waddled through simply by nature of their rapid growth. Again, I can see moves being made in mobile payments there (even though when I talked to a principal at visa’s corporate strategy office in sf he said they were going to try to continue their business model in developing countries, which could mean my hypothesis is a load of bs). Mobile health services are going to be an asset–think of how much more convenient it will be for low- and middle- class citizens in the Third World to contact doctors, get diagnosed, and get prescriptions. Mobile apps are easily accesible pieces of software, so imagine for instance if NGOs can leverage these to their benefit…Again these are lofty expectations, theoretically minded questions. Nonetheless this explains why people are so obsessed with the possibilities of mobile.

Web 2.0 is all about mobile. I’m sure that’s been said before, but following my train of thought as I segwayed from mobile payments to mobile applications has made me realize what all the fuss has been about.
Categories: Mobile, Payments
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