December 6, 2010

monster trend: the mobile wallet challenge

I wonder if ATMs are to be a thing of the past if my mobile is my wallet. In an ideal world, why would I need cash. Lending money to a friend would be like using Bumb to exchange contact information. 

One side effect in the no ATM and smartphone as a wallet context, I believe as consumers we have to keep an eye out for our privacy again. The challenge is transaction data, this is your buying patterns, what you bought when. Who will own your buying patterns? Who will use it to get us to consume more? A mobile as a wallet to me must means cash in my pocket.

It’s important to have cash transactions remain cash transactions, ie without a trace, this is a great opportunity. I fear very much the carriers getting a hold of this information and then using it to profile me even further. I don’t think of myself as paranoid, still it’s dangerous to my privacy over time to leave so many breadcrumbs behind. As the old saying goes ‘the more information I have online, the easier it is to find even more’.

Without a trace transaction is going to be a battle royal to keep our carriers or vendors from collecting this data. I believe the social graph is so important as a recommendation engine to drive more revenues, that the incentive for anyone to put that infrastructure in place may not be there with the advertising model we live in.  A mobile as a wallet business model means paying a fee to put money on my mobile and that’s it, just like our bank card.

Wrapping up, think of it this way would you buy something that could say something about you, that you don’t want others to know about. We need to have control over the transaction information. One opportunity in the mobile as a wallet is a cash transaction concept, otherwise way too many people will know about who you are.  In the google adwords, and facebook ‘I like’ world we now live in, without a trace transaction has to find a business model. I think five years out, the ATM business will still be alive and well. The mobile will allow us to do many transactions we want to do, and there will still be cold hard cash in my pocket.

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