Jan Ondrus, ESSEC Business School, Kalle Lyytinen, Case Western Reserve University, and Yves Pigneur, University of Lausanne
With the widespread adoption of mobile phones for voice and text messaging, a recurrent question is what will be the next killer mobile application? Many analysts, consultants, and researchers have focused on this question, and not surprisingly, mobile payments have often been identified as a good candidate. Being able to pay by using a mobile phone looks an obvious alternative given the fact that 80% of Western people carry a mobile phone with them, and the fast developments of e/m commerce and electronic payment systems.
Up to this point, only few cases of some success were identified in the mobile payments. Japan, South Korea, Singapore clearly lead the pack in the development of the field. Several countries in Asia offer mobile payment services that can be used in many purchase scenarios, such as manned and unmanned, remote and proximity payments for physical and digital goods. Even though, their deployed technologies and services offered are more varied and advanced, the usage rates are still low and will take time to grow. Learning from the history of credit card adoption, it will take time before the mass adoption of any new payment system is reached. In Europe and the U.S., most solutions have been launched for specific purposes (e.g. digital content, parking, vending machines). These niche markets ensure a relatively secure business case, but the growth potential of these mobile payments is limited.
The reasons why most Western countries have not been able to deploy mobile payments in a larger scale has not been scrutinized carefully, though it appears that the success of mobile payment solutions greatly depend on effective alignment between a business model and the business and physical environment in which it will be launched. Our objective is to examine carefully factors that influence the success or failure of the proposed mobile payment solutions. In particular, we will examine impending factors that lead either the failure of developing a robust business model or alignment or to the low uptake of the proposed solutions. We develop this study with an inquiry into institutional, economic and behavioral factors that shape mobile payment provisioning and adoption. To this end we identify and integrate three frameworks to analyze mobile payment adoption and diffusion. The first framework leans on the economic analysis of the mobile payment market. The second one looks at strategic and environmental drivers. Finally, the third one focuses on resources and business drivers that shape mobile payment provisioning.
We apply the frameworks to explore the failure of three separate Swiss mobile payment cases, which we have been following for about 5 years. Based on our longitudinal research, we confront the frameworks with our process and use data about the cases. We select one of these cases involving most extensive mobile payment trial data for more detailed scrutiny in the light of the frameworks to illustrate why it failed and how it misaligned with a number of critical environment factors.
About the first author
Jan Ondrus is an Assistant Professor at ESSEC Business School, Paris. He holds a PhD in Business Information Systems from the Faculty of Business and Economics (HEC) of the University of Lausanne, Switzerland. He has been a visiting scholar at the University of Hawai’i and at Sungkyunkwan University in Seoul, South Korea. His main research interests are related to mobile payments, decision support systems, and technology foresight. His research has been published in journals such as Electronic Markets, Electronic Commerce Research and Applications, and Information Systems and e Business Management. Contact information: ondrus [at] essec.fr; Jan Ondrus, ESSEC Business School, Av. Bernard Hirsch, 95021 Cergy, France
