This is another area of mobile payments where strategic partnerships are absolutely critical to the success of acceptance, both on the consumer AND merchant side.

I believe that there are strong arguments for targeting consumers directly as well as focusing on the merchants that you sell to. However, if you are tackling mobile payments at the physical Point of Sale, you need to consider a marketing campaign that tackles both consumers and merchants in specific areas.

If a provider wants to target merchants in / near a busy college campus, tapping into this community of college students earlier rather than later will provide the merchant with a value proposition (acceptance / demand) that is hard to ignore.

The problem is that if the consumer proposition is ONLY “easy, secure, and free” then it is doubtful that this creates enough compelling value for the consumer to change his behavior away from his numerous other options.

In the consumer’s mind cash, credit cards, and debit cards are ALL (practically speaking) “easy, secure, and free.” For example, most people won’t go out of their way to use a free ATM vs paying a $3.00 fee – which means that if you can’t change behavior by reducing the price then it is as good as “free” in the consumer’s mind.

Rather than just create a lower cost transaction for the merchants, I would suggest that mPayy would be better served to create a NEW valuable and compelling service offering that the consumer can’t get anywhere else.

There are a number of new transaction types that are uniquely enabled by the cell phone that can’t be done using a card or the internet. Since these new transaction types are “unproven” they in some ways riskier than traditional transactions. But what is the greater risk, taking a new path where no one has gone before, or taking the path where many have already failed?