Mobile payments have drawn significant attention from some of the best innovators in the payments space. A great idea however, is not enough to guarantee success. Payment startups must also mitigate strict legislative and competitive landscapes in addition to bringing a product to market.
“Technology is the easy part,” says Andy Schmidt, research director for commercial banking and payments at TowerGroup. “Selling that idea to the market is much harder. We’re seeing phenomenal ideas out there that make sense to people who follow the mobile payments market closely. But when you go to Wal-Mart or Macy’s with that idea, there’s the head scratch.”
Bling Nation, for example, is taking a hiatus to revamp its product line. The firm, whose product allows customers to link a PayPal account to debit purchases without sharing information, suspended operations temporarily earlier this summer. Likewise, FonePays is selling its technology which includes FonePay’s back-end servers and front-end applications for Web, SMS, Android, and iPhone platforms.
“Having a great product doesn’t necessarily make you successful,” says Steve Geringer, the payments industry consultant overseeing the sale of technology owned by FonePays, a startup that never got off the ground. “You need to find a niche … everybody and their brother is selling mobile terminals.”
Meanwhile, more capitalized firms such as Google, Isis, and Square are rapidly developing their own mobile payments technology.