The SmartPhone Wallet

Direct merchants may tend to see Mobile Commerce, or mCommerce, as primarily an extension of eCommerce on SmartPhones, via apps or SmartPhone browsers (see for instance M&S Wins Big With mCommerce).

But that's just one "side of the moon." On the other side (the dark side for those who don't use it), there is the much, much larger aspect to Mobile Commerce in which the SmartPhone is used as a payment device, either in lieu of credit cards or in conjunction with them, and primarily in person at retail stores, where "Near Field Communication," or NFC (which only works when sender and receiver are inches away) transmits the customer's data to the POS terminal for payment processing (although phone-to-computer or phone-to-phone transactions are also supported).

This is an inherently secure method of payment, if handled properly. And it is the tip of a very large iceberg (apologies for mixing "moon" and "iceberg" metaphors!) that quickly gets very technical because of the intrinsic complexities of the payment processing world.

A number of experts in the transaction management field have tackled this subject, but none more concisely and succinctly than David Schropfer, a founding partner in The Luciano Group, a global telecomms consulting organization. In the first book in his "SmartPhone Wallet" series, subtitled "Understanding the Disruption Ahead," Schropfer clearly and lucidly explains the stakes in the coming revolution in retail transactions in which your SmartPhone will not only take the place of your credit cards but can in fact eliminate much of the "overhead’ in the current payment management process.

Consumers and merchants alike can benefit significantly from SmartPhone transactions, as will less-developed economies where ‘disintermediation’ will not only improve profitability but also help to side-step endemic corruption, which Schropfer correctly points out.

But for any of this to become a full-blown reality all players will have to adhere to sensible standards, which are currently in the embryonic stage (see my blog post on one player addressing this: ISIS: Mobile Payment Standards/Security). Schropfer's discussion of the standards issue is one of his "hot buttons," as well it should be. As he indicates, the future of this fast-emerging field may depend significantly on whether the standards that emerge for the management of SmartPhone transactions make sense to all stake-holders: consumers, merchants, transaction processors, and banks (the card brand kingpins, V/MC/Amex/Discover, are also relevant, but as Schropfer indicates, may end up drawing the short straw -- depending on how this field evolves).

Schropfer’s coverage of these subjects is thorough and illuminating, providing a clear and concise overview of all relevant topics, and should be the perfect introduction to the next book in the series: The SmartPhone Wallet – A Consumer Guide to the Services of Today and Tomorrow," which will cover this important subject in even greater detail. The current volume is available for purchase at Amazon for the bargain price of just $14.95.