Introduction

　　 Human history has proven time and again that industries will undergo revolutionary changes every time a new information technology is introduced. Looking back, in the four computing eras (Mainframe, Minicomputer, PC, Desktop Internet), it was those companies which managed to take advantage of arising strategic opportunities that were able to grow and flourish better than their peers and continue to thrive. 2010 was the year wireless mobile Internet access started to boom. Wireless mobile Internet access and cloud computing technology have converged and begun to penetrate different industries, changing the rules of the game. The next generation of great corporations is in the making and limits are removed for payment business to develop. Is your bank ready for the cloud payment age right around the corner?

I. The Era of Wireless Mobile Internet Access is Here

　　 Productivity in a specific age in time is defined by the speed of communication of information and the equipment and mode that give access to information. As technology continues to advance, the fifth computing technology revolution in human history -- the booming of wireless mobile Internet access -- has arrived.

　　 Firstly, the advance of communication technologies has provided wireless mobile communications the foundation for data transmission. High-speed wireless data transmission has made high-speed data storage and retrieval "in the cloud" possible. Secondly, development of equipment for wireless mobile Internet access has seen explosive growth with competitive suppliers flocking into the market. By equipment, we are talking about mobile phones, tablet computers and larger Internet equipment (such as Internet television sets). As you may have noticed in the market, three types of equipment supported by the iOS (Apple) and Android (Google) mobile open platforms started to develop quickly in 2010. And, although their market shares are dwindling, traditional platforms such as Symbian (Nokia), Blackberry (RIM) and Window Mobile (Microsoft) are putting up a fight. One can say the development of wireless mobile Internet access equipment has made real time cloud computing of data possible. Thirdly, services related to cloud computing are mushrooming. With wireless mobile Internet access and related equipment technologies supporting "in the cloud" data storage and retrieval, it is only natural for cloud services to emerge around us. APP (user-end applications) made the hottest investment in 2010. Its introduction, which has markedly shortened the distance between expectation and the reality for customers, rocked the market dominated by traditional software and major software companies. Currently, the types of cloud-based business operations are: (1) expansion and development of traditional media browsing channels, (2) expansion and development of traditional B2C business, (3) expansion and development of C2C business, (4) other services related to data storage and retrieval "in the cloud", and (5) other services designed to operate on open platforms. In summary, cloud-based business operations could be an extension of traditional business models as well as other services founded on data storage and retrieval capability "in the cloud" and also industry programs designed to work on an open platform.

II. Cloud Payment Industry

　　 Regarding how deeply the arrival of the wireless mobile Internet access era is going to impact the payment industry, we shall pinpoint analysis on three aspects, namely the definition of cloud payment industry, the estimated market size as well as the opportunities for and approach of strategic innovation. Our hope is in doing so we can offer ideas for reference by decision makers in the payment industry. In this process, we believe the more important focus should be on seizing the opportunities for and picking the right approach of strategic innovation instead of accuracy of forecast data. As though forecasts were made in the 1990s on the impacts of the Internet on the world, evidence we have today has shown that the speed and magnitude of development of the industry has far exceeded our imagination.

Cloud Technology + Payment Industry = ?

　　 Enabled by cloud computing, wireless mobile Internet access has presented a totally new method of transaction to almost all consumer industries, and these industries need the support of the payment industry to complete those transactions. Against this backdrop, the cloud payment industry is born. For a corporation to devise innovative strategies, it often needs to take reference of rules outside its industrial realm and incorporate imported modes into its operations to kick start innovation. The open platform poses no limit on innovation and is an organic field for the cloud payment industry to sprout and blossom. So, the most accurate answer to the title of the article may be – The future, only the cloud would know.

The estimated market size

　　 To make it easy to estimate the size of the wireless mobile Internet access market, we picked the outbound travel market of mainland China as reference (Chart 1/ Chart 2). Integrating our findings with those in a Credit Suisse survey on the US wireless mobile Internet access market and making downward adjustments taking into account factors such as single device spending and payment proportion, we arrived at a very conservative forecast. We found that, by 2015, there will be 140 million sets of wireless mobile Internet access equipment in mainland China using the two major open platforms iOS and Android. The number of outbound trips made by mainlanders then would only be 100 million. In terms of market size, just the market for paid APP download through wireless mobile Internet access will worth up to US$13 billion, about 10% of the outbound consumption market in the same period. And this number has not taken into account the continuous robust growth of wireless mobile online transactions in the country.

Strategic Innovation Opportunities and Approach

　　 Wireless Mobile Internet access is open, instantaneous and innovative. It provides consumer industries a new means of communication as well as sales and marketing. It may not replace traditional wired Internet access immediately, but it is expanding and partial replacement is happening. And whether those in the payment industry as close associates of consumer industries are able to seize the opportunities arising in the development will decide who will have competitive advantage in the future.

(1) More Accurate Information Means More Efficient Sales

　　 "Mobility" is the defining difference between wireless mobile Internet access device and traditional device. It is also the foundation for more efficient marketing and sales. Firstly, mobile communications allow instantaneous access to data and therefore remove the distance between businesses and consumers. Businesses can communicate with consumers anytime, anywhere. Secondly, user-end designs make the process of information exchange more interactive, entertaining, convenient and proactive. Thirdly, with two-way information flow capability, accurate targeted communication is possible. Fourthly, data storage and retrieval "in the cloud" allows businesses to markedly trim communication cost. Card issuing companies can skip printing offer booklets and reprinting them to include new bonuses would be unnecessary with the help of a backup system. Fifthly, through "in the cloud" surveys, we can get to know our customers better and provide them with preferred new service modules. You can provide information such as exchange rate and weather inquiry services, hence raise the quality of your value added services.

(2) Real Time Positioning Technology Sparks New Thinking for Cardholder/Merchant Value Added Services

　　 Another feature of wireless mobile Internet access is real time positioning capability, which gives room for innovation in communication of information. It enables financial institutions to provide more new value added services to cardholders and merchant partners. Firstly, instead of static references, a cardholder can access information relevant to his location, such as the nearest bank, ATM machine and the addresses of merchants providing offers. Secondly, information provision is not just one-way anymore, but two-way. For example, after a cardholder found the merchant, he could download bonus coupons on to his mobile equipment for showing to the merchant to claim the bonus. Furthermore, the cardholder may use a "Take Me There" key on the mobile device for directions to the merchant’s shop. Thirdly, the open and share function of the equipment can broadcast information faster and wider and at lower cost. Say, after the cardholder received bonus offer information from a merchant, he could forward the information to friends and relatives via micro-blog and also comment on his usage experience and share those comments with the community. With the help of real time positioning technology, card issuing institutions and acquiring institutions are able to provide cardholders and merchants with value added services that are more interesting and interactive.

(3) The Massive Digital Download Market - A New Market for Virtual Cards / Pre-Paid Cards

　　 The usage of wireless mobile Internet access equipment usage is tied essentially to APP and most APP carry a download fee. For virtual cards / pre-paid cards, downloading of such software is an emerging new market. According to transaction information of MasterCard Worldwide, since the Apple iPad and iPhone 4 became available in China, the share of cross-boundary APP download transactions to total cross-boundary transactions had surged to 46% in October from 12% at the beginning of last year. (Chart 3) As mentioned earlier, our preliminary estimate of the size of the digital content download market in mainland China is at more than US$13 billion. Based on the 1.65% commission charged by card issuing companies for online transactions, we are looking at a market that promises more than US$200 million in profit. Apart from using credit cards, users of wireless mobile Internet access device who need to download digital content can have their additional demand met by virtual cards with flexible limits (the MasterCard InControl Solution) or pre-paid cards (MasterCard Prepaid Card) which approval processes are fast and hassle free.

　　 The digital content download market is huge. It is, however, insignificant when compared with payment demand resulting from traditional businesses shifting to cloud computing services. For the payment industry, the ability to capture this payment demand will be the major yardstick for measuring leadership. Currently, many consumer sectors are actively developing cloud computing services. Consumers are now able to use wireless mobile Internet access device to conduct transactions that could only be done via desktop equipment before, like purchasing air tickets, hotel and restaurant reservations and group purchasing (B2C, see Chart 4&5), or buy goods or services from individual sellers (C2C Chart 6). Development of wireless mobile Internet access has presented cloud computing services an opportunity for exponential growth. In the foreseeable future, wireless mobile online payment will grow rapidly and gradually become an important sales channel complementary to traditional online shopping, mail and telephone ordering, and going to the store. Since the Internet payment and physical payment settings in China are different, it is likely that the setup of the country’s wireless mobile Internet payment arena will be redefined.

　　 One can say for sure that only corporations with shrewd insights of the mobile payment market and can provide secure, convenient and simple payment solutions for wireless mobile Internet access device, as well as forge the most formidable strategic cloud computing service alliance will enjoy consistent competitive advantages in the future market.

III Conclusion

　　 In his famed literary work the Art of War, Sun Tzu says: "One who knows to ride on the flow, wins the battle." 2010 saw the booming development of wireless mobile Internet access technology and the technology (cloud computing) starting to penetrate different industries, changing the rules of the game and nurturing the next generation of great corporations. The payment industry is also presented with more room for development. Leaders of the industry who wish to capture rising opportunities to build businesses that last will have to be forward looking. They need (1) in-depth understanding of the impacts of wireless mobile Internet access on payment related industries, (2) the ability to introduce user-end APP as early as possible on mainstream wireless mobile Internet access device platforms, (3) to use the technology to create new value added services for cardholders and merchants, (4) to enter the virtual card and pre-paid card market to tap digital download demand and also (5) to provide more secure, convenient and simple payment solutions to wireless mobile Internet access devices. Is the bank you are managing ready for the impending cloud payment service era?