Mobile Opportunity

Towards the end of last year I spent a number of weeks on holiday with my family in Tanzania. On our way back from visiting a town by the coast, we found ourselves in a village with no more than a few dozen inhabitants.

Towards the end of last year I spent a number of weeks on holiday with my family in Tanzania. On our way back from visiting a town by the coast, we found ourselves in a village with no more than a few dozen inhabitants.

The nearest city was hundreds of miles away, and with a population of no more than 70, we were about as remote as you could get. It struck me when preparing to pay that everyone in the queue had their mobile phones in their hands at the ready, and that the checkout girl called out a series of digits rather than hold her hand out for cash.

This was the first time I had witnessed mobile payment first hand, a system that has helped millions make financial transactions despite lacking access to traditional bank accounts. For more than a decade now, mobile payment systems such as those I witnessed in Tanzania have allowed rural economies to flourish despite being cut off from better-serviced urban areas.

Around the world it is estimated that some 2.5 billion people in lower to middle income countries lack access to financial services. However, it is estimated that 1.7 billion of these people have a mobile phone, connecting them to networks and infrastructure that can be used to sustainably offer financial services such as payments, transfers, insurance and savings.

Last month saw the launch of Paym, a new service supported by banks including Barclays, Lloyds and HSBC that will allow their British customers to transfer money to one another via their mobiles. Linked to a person's account, users can now send money without knowing the sort code, bank or even account number of the person they are paying.

Big figures were quoted in the build up to the launch, with banks expecting 1bn payments to be made by 2018 as customers use the service to make direct payments to people such as window cleaners and builders just by pressing a few buttons on their smartphones. More than 360,000 had already registered when the system launched.

With technology as simple as this and secure enough to reliably prevent money going missing, why are British banks only now starting to offer their support?

Early polls indicate that there is a residual mistrust of mobile payment here in the UK, with nearly half of those surveyed by Consumer Intelligence saying they would definitely not be using the service. But scratch a little deeper and there is a strong indication that mobile payment is here to stay.

For years people have trusted the likes of Paypal when buying online, while mobile payment has already demonstrated its ability to offer an attractive alternative to cash - as the runaway success of apps such as Hailo and Uber indicate. But away from minicabs, the UK is a latecomer to the mobile party in many ways and is only just starting to catch on to the opportunity it provides.

The truth is the technology behind the scenes has only recently caught up - and it's the hi-tech in the background that is making all the difference. Banks, for example, now have the opportunity to drastically minimise fraud, and it is this I suspect which has prompted a surge in their support.

By querying the location of both individual and transaction, for example, mobile technology has the potential to vastly reduce the occurrence of identity theft. My firm WANdisco, a Big Data outfit co-headquartered in Sheffield and Silicon Valley, is working with a number of banks to do just this, ensuring they have reliable access to the data that can help keep their customers safe.

I've no doubt that soon, thanks to mobile, banks will be much better at proving their customers are actually making a payment.

It amazes me that in this day and age so many bankcards are erroneously cancelled, when if there are suspicions of foul play a few simple queries could make all the difference.

After mistakenly blocking a debit or credit card, most banks can expect to receive calls from an irate customer - most likely someone who has found themself unable to pay for a meal, withdraw cash or check out of their hotel.

A look back at the plane tickets, travel insurance or foreign currency among the recent purchases would certainly have suggested the cardholder is preparing for some time overseas. But it is only by monitoring subsequent location that a bank can determine for sure whether their customer has not been duped - and that the person who bought the suncream from Gatwick or novel at Heathrow actually boarded the flight to Spain.

Similarly, the prospect of accurately identifying location can help recognise genuine fraud much more quickly than traditional methods. As soon as uncertainty arises around a particular transaction, its location provides a strong indication of where the potential crime is taking place and offers a wealth of evidence leading up to the event.

Compared to credit cards and cheques, where all you need is a pen, sophisticated mobile payment is able to offer a level of security previously lacking. While cheques and credit cards can tell you where the purchase took place, neither are sufficiently location-aware to determine whether it's you or not. Cheques can take weeks to be cashed and it can take up to 48 hours before regular card-payments are processed. If one thing is for sure it's that neither offer the level of security that could be provided.

The real challenge will be ensuring companies are able to keep on top of the data that's generated by these location-aware devices, allowing sufficient control to benefit from processing the information in real time.

No doubt there will be many who remain to be convinced of its potential, but the truth is the sooner we start thinking creatively and use data that already exists, the sooner we can benefit.


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