Mobile operators to become banks

Mobile phone operators could emerge as competitors to traditional banks as they begin to offer payment services for small consumer items, according to researcher Gartner.

Consumers will soon be able to use their phones to locate and guide them to the nearest coffee shop, for example, and automatically pre-order their drinks and have the items billed to their phone statements, said Gartner analyst Nick Jones.

"Unless they are stopped by regulatory laws, mobile operators will become financial services companies especially for micro payments," he told attendees at the Gartner Symposium/ITexpo this week.

He added that banks will still control the market for purchases in the thousands of dollars range, but for items priced below that, the battle will be between traditional banks and telecoms carriers.

But Jones believes that operators will fail in their aim of being mobile portals because they do not have enough content or partnerships to compete with traditional portals, such as Yahoo, that are beginning to shrink their services to mobile phones.

"Mobile operators won't succeed as mobile portals because they don't have commercial relationships. Existing mega portals like Yahoo can leverage their knowledge of customers and content and translate this to mobile phones," he said.

Jones warned that companies interested in developing services for the mobile world should consider issues such as personal privacy and regional regulations, especially in Europe.

He cited a project by Siemens, which is building a pendant for children to wear which keeps track of their location. This may be useful in tracking young children, but teenagers will feel that their privacy is being invaded, he said. Similarly, if this device is used in the business world, employees may not like to have their every move followed by their employers.

"These laws are not defined and so you need to put in place a group to monitor legal and ethical issues before implementation," advised Jones.

He also suggested that companies creating mobile applications should not use their existing development teams because they may not understand that such software needs to be developed at great speed to meet market demand and to beat the competition.

He advised companies to create separate development teams and give them lots of help to deal with their domestic chores, such as grocery shopping and doing the laundry, to ensure that all their energies are spent creating mobile applications.