Payments news pointed out this page with the papers from the 2007 Nonbanks in the Payments System Conference in Kansas City. It starts with a first paper by Rosati and Weiner which compares the US en EU payments market and regulation. And interestingly we can see a complete white spot for m-payments, suggesting the market is still in its infancy.
Although volumes are still extremely limited, there are expectations in Europe about their growth potential, also in light of the forthcoming regulatory opening to nonbank payment institutions (see Section 4.2.2) which may contribute to a significant development of m-payment services.
Is this true?
I think it may be a sign of the complete ivory tower approach of central banks who don't have sufficient knowledge on the new payments markets out there. For example, earlier in 2003, a local policy analyst and payment expert, Lelieveldt, observed that M-payments already outsmarted the Dutch e-purse, with mobile operators being the new kid on the payments block. Yet, some four years later it appears as if regulators and central banks still haven't woken up to reality. Which is quite astonishing. Let's do some numbers here.
In the Netherlands payments via pre-paid or postpaid mechanism of the mobile phone (be it SMS, premium services, i-mode or what have you) have in 5 years come to grow from a small size comparable to the credit-card (40 M transactions), to the niche-market size e-purse type: 150 M and now have surpassed the debit-card at POS landmark of 1,5 billion transactions (deriving this from last years 2 billion euro revenue income for so-called data-services of the Dutch mobile industry). So in terms of number of transactions, m-payments are now the dominant payment mechanism in the Netherlands!
One wonders as to the nature of incidents that would be required to let the central banks wake up to reality. It can only be a monely laundering scheme via pre-paid phone money that will eventually make everyone look back amazed by the question whether it was ignorance or a deliberate regulatory capture situation that made the regulators/supervisors turn a blind eye as to the mobile operators' payments activities.
Which would of course be an interesting topic for a next research conference...
