Mobile Payments: Felicitous Timing?
by Marcus Treacher, Global Head, eCommerce, HSBC
While mobile banking services have been available for a while in the global commercial banking space, the picture as regards mobile payments has been incomplete. But as Marcus Treacher, Global Head, eCommerce at HSBC explains, a combination of technology, infrastructure, and shifting attitudes/behaviour is changing this.
One of the most striking points about mobile payments is their ubiquitous relevance, irrespective of business size or location. They also have a broader significance in the way in which they complete the mobile banking jigsaw and are therefore likely to drive further new functionality that was previously impossible without access to the entire payment process. However, the maximum advantage will fall to users whose banks can integrate deep understanding of their clients' businesses with the right mobile strategy.
The demand for mobile payments is certainly evident. For instance, in the last six months of 2012 client payment instructions sent via HSBC’s corporate banking mobile application, HSBCnet Mobile, grew by 204%. Furthermore, while corporate treasuries are normally fairly conservative organisations when it comes to new technology, many are now using HSBCnet Mobile on a regular basis.
Mobile payments momentum comes from the way treasurers have changed their role over the past decade to play a far more active consultative role across the business and are therefore travelling extensively to meet and assist business units face to face. This trend has also been accelerated by globalisation. Corporations have hugely expanded the geographic range and sophistication of their sales and supply chains and have therefore had to learn to deal with the complexities of working in multiple currencies and countries. This has added further scale to treasurers' travel plans, which has consequently seen them expecting more in terms of mobile functionality that allows them to operate efficiently while out of the office.
Infrastructure and hardware
The good news is that a lot of the building blocks needed to deliver enhanced mobile payment and banking functionality are now available. A major enabler of the greater use of mobile payments for business is the growth and quality of mobile networks in general, but especially in emerging markets. For example, India is expected to overtake the US and become the second-largest mobile broadband market in the world (behind China) by 2016, with 367 million mobile broadband connections.
Another important catalyst has been the improving quality and capability of user interfaces, particularly on smartphones and tablets. These now combine far greater ease of use, intuitiveness and screen real estate than conventional mobile phones, which has understandably driven greater adoption of mobile banking by treasurers. Those making business critical decisions or authorising multimillion dollar wire payments obviously will feel reticent about doing so on a traditional mobile phone with a small screen and keys where the increased risk of an error could have expensive consequences.
The on-going huge acceleration in mobile processor performance and sophistication also means that the business/financial analytics users wish to run no longer require a treasury workstation. This opens the door to far more sophisticated mobile services. For instance, a treasurer might be able to run scenario modelling to select an appropriate FX hedging strategy (which might include evaluating multiple option valuation models) and then execute their chosen strategy immediately with their banking partner.