MOBILE REMOTE PAYMENT: AN EXPLORATORY STUDY OF MERCHANT ADOPTION

There are more than 5.6 billion mobile phone users worldwide, making mobile phones more common than PCs. Mobile technology is a modern phenomenon with a great impact on industries and our society. Mobile phones began as very limited devices that provided only voice services. Today, these devices also provide a myriad of data services that allow us to browse the Internet, send text messages, check emails, watch movies, listen to music, take pictures, record videos, play video games and read documents. Mobile can also be used for payments, thus adopted by merchants in such a way to provide a new way for their customers to make their purchases. Different systems and business models have been developed for enabling Mobile Payments such as "Proximity" systems based on NFC technology and "Remote" systems that use the Mobile Operator's network and mostly widely adopted technologies such as SMS, WAP and Mobile Internet. Mobile remote payment systems are one of the most popular technologies for transactions today, especially across the media and online industries. Prior research mostly focuses on technology innovation or consumer-centric view while there is still less knowledge related to supply-side perspective and merchant attitude towards adoption of Mobile Payments. Literature is even more scarce when it comes to understanding the merchant adoption of specific Mobile Payment Systems such as "Remote Payment" systems based on carrier billing technologies. Typically, these systems have been widely adopted by merchants around the world and for some have become a phenomenal tool of success. There is also scarcity of research describing the operative factors affecting the deployment and management of Mobile Payments. This research is an exploratory research of the merchant adoption of Carrier Billed Mobile Remote Payments. This qualitative study was based on in depth interviews conducted on executives and managers from 15 international companies that operate globally in the digital space and that have made a successful use of Mobile Remote Payments. The results of this research are divided into two parts. In the first one, which is dedicated to the "Strategic Phase", the research aims to understand what enables, drives and inhibits the adoption of Mobile Remote Payment systems by merchants. In the second part, the “Operative Phase”, the research instead outlines the factors driving or inhibiting the successful deployment and management of such systems by merchants. Both parts are organized into descriptive frameworks where the factors identified are analyzed in great detail and explained also through direct quotes of the interviewees. What emerges from the “Strategic” part of this study is that in order for merchants to adopt Mobile Remote Payments, they must operate within very strict limitations, such as offering mainly digital goods and services and within a micro-transaction based business model. Furthermore, these merchants have to bear incredibly high commissions if compared to credit card or other payment tools. However it emerges that this tool is so simple and secure to use, and immediately available to anybody with a mobile phone that it produces key beneficial factors for the merchants that really drive their adoption. These factors include addressing unbanked users (Young people, emerging markets), increasing impulse purchases and the possibility of developing new business models. The result of the study of the operative phase shows that 4 macro factors clearly need to be considered when merchants deploy and manage a Mobile Remote Payment system. These are 1) Purchase Experience; 2) Payment System Reputation; 3) Merchant – Provider Relationship; 4) Price Structure and Billing Policies.