Other than the fact that we’re soon going to start dropping like flies from cancer of the ear, mobile devices do promise a revolution even greater than the internet.  In fact, mobile is becoming the internet.  Especially lower income people are, and will increasingly rely on their mobile phones to access the internet: it’s cheaper and way more convenient.  Earlier this year, smart phones outsold dumb (aka feature) phones by prepaid carriers, which are preferred by lower-income households. So with all the hype the past 5 to 10 (yes!) years, why are the leading mobile payments companies mostly “ahead of their time,” to put it euphemistically, and not at scale?

While the reasons have been discussed ad nauseam, here are mine: no transcendent customer value (so why switch?), no compromise on who will “own” the customer (telcos? banks? tech firms?), sophisticated payments infrastructure (vs developing world, where mobile can leap-frog a customer), tight regulatory standards (vs M-Pesa-world, where regulators are lax and easily persuaded), and no national standard setting (like in Europe or Japan).  So, are we likely stuck in an infinite loop where mobile will ultimately go the way of smart cards in the US (always exciting, but never realized)?  Here are my three top catalysts for making mobile payments big-time:

Remote deposit capture. One of the big problems of mobile payments, especially for the underbanked is cash-in.  To use your phone to pay someone or buy something, you need to first get funds “into” it.  For the cash-preferred, of which the US has twice as many as a percent of its total population than any other developed country, this poses a real problem.  It requires going to a merchant and paying them to cash your check and/or accept your cash and make it accessible via your phone.  At that point, you might as well just do all your transaction at said merchant, since they are cheap and convenient.  However, if you could avoid the merchant all together, your mobile phone could actually offer you greater liquidity and greater ease of use. For millions of people that means being able to “cash” your payroll- or benefits check on your mobile phone, like some big banks now allow you to do, kind of.  Take picture of check – front and back – and a digital turk in the cloud does essentially the same risk management as your local check casher: enter remote deposit capture.  Then what?

Bill payment. Many entrepreneurs are playing around with various forms of mobile payments. Pay your friends when you split the bill at Subway.  Send money home to mom in Mexico.  Buy stuff online.  These are the most common ones I see.  None, however, are as meaningful as paying your bill to catalyze getting mobile payments to scale.  A bill is compulsory. It is due on a particular day. Most are due regularly.  The cash-preferred value liquidity highly: I’m willing to pay more to pay my bill the day before it’s due, vs pay less and tie up my cash for several days before.  I think mobile-bill is the one payment type that can get to a dipping point.

EMV enforcement. Of course, “mobile payments” means many things to many people.  One is the promise that your phone can replace your card(s) and cash.  This would happen by “tapping” your phone, and a technology called Near Field Communication (NFC) would transmit your credentials and payment authorization to the point of sale (POS).  For this to work, all phones need to have NFC and even more painfully, all POS-devices need NFC.  Yet another acronym, EMV, is likely to fix all this.  It’s a set of standards issued by all the major credit card companies that are enforced almost everywhere excepted the US. As of October this year, US-based merchants who comply with EMV will get a variety of breaks.  This will start a landslide of POS devices that accept chip cards and NFC, and end the hardware chicken-and-egg game.