Making Money on Mobile Money

2:15 PM -- Wireless operators clearly want a cut of the revenues in mobile payments, as evidenced by today’s consortium of 45 mobile operators pushing Near-Field Communications (NFC). But, they’ve also come to terms with being one of many partners in the value chain, so where’s the dough for them? (See Mobile Ops Unite to Keep NFC in the SIM.)

Since operators won’t be taking on risk to bill transactions themselves, they’ll have to get creative to make money on mobile money, according to says Jose Magana, Pyramid Research senior analyst and mobile payments practice leader.

Their role will be doing what they do best -- providing connectivity. Their payback may be minimal for it, but there are other avenues. Delving into mCommerce-related services like coupons and advertising could provide extra bucks. And, Magana says, wireless operators could sell conditional rights managements to merchants or leverage their consumer knowledge to add value on top of payments. (See US Wireless Operators Spend Big on mCommerce.)

I think the bigger point is that even if mCommerce doesn’t fatten operators’ wallets, they should get involved to help keep their customers loyal. A mobile wallet is convenient for consumers, but -- more importantly -- makes them less likely to churn. If their wireless service and their banking services are tied to their service provider, there’s a strong incentive to stay.

"There’s a large benefit in just cutting churn by a few points,” Magana says. “There’s lots of money to be made.” Of course, if you lose your phone, you’ve lost your wallet too. But, operators can also lend a hand -- with education and security -- here as well.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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