A leading advisor to the Bank of Finland says that expanding mobile phone payment systems will revolutionize the way we buy and sell during the next decade. Harry Leinonen is Advisor to the Board of the Bank of Finland and is in charge of payment system policy issues at the central bank. In his latest publication, Leinonen forecasts that the development of international standards will bring a major change to payment habits. He says that while payment services are constantly developing, current payment methods have developed out of paper-based services. With the proliferation of computers and networking, customers are interested in new forms of digitalised and integrated payment instruments. Within the payment industry, there is a trend towards internationally standardised network-based services. There are wide difference in national payment habits and efficiency within the European Union. Leinonen argues that with its present high level of electronic payment use, Finland has a head start in moving into the widespread, sophisticated use of mobile phones that he sees as the next stage in near-realtime money management. Slow to change
The present process of development means that we can expect to see improvements in five different areas. Payments will become faster, cheaper, more secure, easier to send and receive, and better integrated to customer systems and processes.
However, Harry Leinonen points out that customers are slow to change their payment habits and need several clear incentives in order to do so. Based on past experience, the average penetration time from start to maturity for a new technical feature such as introducing ATMs or e-banking seems to be about ten years.
Many factors point towards mobile smartphones becoming the main payment instrument for the Finns during the 2010s. But, for people to move beyond their current use for buying electronic tram tickets and soft drinks, it will require good security and international data content standards.