EXPERT Insight

Mobile Payments: A Framework for Success Premium

The Keys to a Killer App

Calvo, Eduard

Date: Fourth Quarter 2016

Tags: mobile payment, m-payment, mobile wallet, app, domotics

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Paying for your coffee, getting on the subway or splitting dinner with friends are everyday actions that can now be done using a mobile phone. But there is a lot more to mobile payments than merely substituting a phone for a card when performing a financial transaction. Managers need to think less about the technology per se and more about how the new functionalities of m-payments can enable superior value propositions for their customers. Doing that successfully, however, is no easy task. It requires aligning many players from a populated and diverse business ecosystem. This article outlines a simple framework with three key success factors that may help when assessing prospective m-payment solutions.

Tools and Frameworks:

> "Mobile Business Ecosystem" depicts how much more populated the business ecosystem is for m-payments than for the traditional, card-based payment value chain.
> "Key Drivers in Mobile Payments" stresses how prospective solutions have to strike a balance between supply and demand, leveraging complementary assets that can speed adoption.
> "The Framework in Action" shows the very different outcomes that result from delivering on some success factors more than others.

Examples Cited:
iTunes, Google, PayPal, Venmo, Starbucks, Rabobank, Alcatel-Lucent, Apple, Samsung, Safaricom, M-Pesa, Kenyan banking, WeChat, Red Envelope, Tencent, Tenpay, Alibaba, China, JPMorgan Chase & Co., Chase Pay, Square Wallet

Research Basis:
Based on IESE case studies, teaching and research by the author in the area of m-payments and service delivery systems.

About the Author:
Eduard Calvo is an associate professor of Production, Technology and Operations Management at IESE.

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