Developing a framework for mobile payments integration

This paper derives a theoretical framework for consideration of both the technologically driven dimensions of mobile payment solutions, and the associated value proposition for customers. Banks promote traditional payment instruments whose value proposition is the management of risk for both consumers and merchants. These instruments are centralised, costly and lack decision support functionality. The ubiquity of the mobile phone has provided a decentralised platform for managing payment processes in a new way, but the value proposition for customers has yet to be elaborated clearly. This inertia has stalled the design of sustainable revenue models for a mobile payments ecosystem. Merchants and consumers in the meantime are being seduced by the convenience of on-line and mobile payment solutions. Adopting the purchase and payment process as the unit of analysis, the current mobile payment landscape is reviewed with respect to the creation and consumption of customer value. From this analysis, a framework is derived juxtaposing customer value, related to what is being paid for, with payment integration, related to how payments are being made. The framework provides a theoretical and practical basis for considering the contribution of mobile technologies to the payment industry. The framework is then used to describe the components of a mobile payments pilot project being run on a trial population of 250 students on a campus in Ireland. In this manner, weaknesses in the value proposition for consumers and merchants were highlighted. Limitations of the framework as a research tool are also discussed.