There was some straight talking at the debate on driving profitable partnerships between communications and financial services this morning. Moderator Dave Birch, Director, Consult Hyperion, observed that the most vibrant and active markets regarding mobile payments – Japan, the Philippines, Korea and Kenya – didn’t rely on partnerships at all, so much as acquiring companies with the expertise required.

So why partner at all? Douglas Kilgour, Mobile Commerce Executive, Isis, said, “Verizon and AT&T wouldn’t have considered partnering two years ago, but having approached merchants separately they realized that the only way they’d get their support was by acting as a single entity and from the operators’ point of view, they need scale.”

James Anderson, Group Head, SVP, Mobile and Emerging Payments, MasterCard Worldwide argued that in the last two years, big strides had been made: “The key is the amount of energy the partners are prepared to put in, especially when two such mature industries come together. It’s not a cheap undertaking; it needs the right level of investment.”

Birch also pointed out that in Europe and many other markets, there are fewer possible partners than in the U.S. where the banking sector is more fragmented, which adds complication and potentially makes acquiring the all-important scale difficult.
Stewart Holmes, Barclaycard U.S., comments, “The market will start to change once we get beyond simple payments, extending to rewards, coupons and loyalty promotions, for instance.” He suggested that perhaps parties are too ambitious in what they expect from partnerships – and we need to accept that the inevitably take longer.

Holmes should know what he’s talking about: Barclaycard in the U.S. has grown through cooperation.

Birch rounded the debate up predicting that mobile money is blurring the distinction between online and offline – for example, people go to look at goods in a shop while ordering the item for delivery from Amazon, say, having done a price comparison first on their cell phone.

Taking this a stage further, there’s a facsimile of a Tesco store in Korea whereby if you click on the QR code on a bottle of milk and other groceries, for instance, you pay for your shopping and the goods are delivered to your home very quickly. Birch argues that this is the next paradigm in retail.

As Holmes said, “Payments are the driver that will enable the introduction of so much else.”