If you ask Brian Mooney, the CEO of Bank of America Merchant Services, there won't be one "big bang" moment when we're suddenly paying for everything with our mobile devices. But the transition is happening, and happening now.
If that's right, it means that 10 or 20 years from now, we'll be looking back at today as the time when the change was happening. For somebody in Mooney's position, that's particularly exciting because he expects that he'll be able tell his grandchildren: "I was there when we changed people's lives."
Mooney made his remarks during a roundtable at the Electronic Transactions Association's Transact 14 conference, so his comments fell on receptive ears. Yet it's hard to argue Mooney's conclusion -- the mobile revolution appears to be in full swing and have the potential to change our world in exciting and significant ways.
Consider:
- According to Google's (GOOGL 0.04%) (GOOG +0.05%) Ariel Bardin -- a Transact 14 keynote speaker -- monthly Internet usage now shakes out to 34 hours on mobile versus 24 hours on PCs.
- Also per Bardin, 42 million people in the U.S. made a purchase with their smartphone in January of this year.
- Juniper Research expects that globally there will be three billion "contactless transactions" on mobile handsets this year, and that that will leap to 9.9 billion by 2018.
- Research from the National Restaurant Association showed that 43% of 18 to 34-year-olds said that they would use a smartphone payment option at a restaurant.
Considering those kinds of data points, it's not hard to understand why Brian Mooney is so excited. But for Bank of America Merchant Services -- which is a joint venture between KKR (KKR 0.45%)-owned First Data and Bank of America (BAC 1.64%) -- this evolution will have significant business implications.
A key theme in the payments industry right now is that the business is now about much more than the exchanging of money. Sure, that exchange still needs to take place, and take place securely -- but that's table stakes now. Today, payments companies also need to help their customers with loyalty programs, data analytics, and with just generally getting to know their end customers better.
And as transactions move on to mobile devices, guess what happens? It gets that much easier for the merchant on the other end of a transaction to get to know you and to get information about you.
For Bank of America Merchant Services, this means that suddenly there's a much more significant way for it to differentiate what it offers from its competitors. If all that a payments company is doing is capturing and processing a financial transaction, that's hard to differentiate because that's become a fairly commoditized offering. But if a payments company can offer a whole solution around payment processing that helps the business owner operate better and even grow sales... well, that's far more interesting.
That's the opportunity. But of course, just as it's an opportunity for Bank of America Merchant Services, it's just as much of an opportunity for its competitors. So, with the mobile revolution in progress, it'll now come down to who is going to do it better.
