The Art of Scaling Mobile Commerce

March 29, 2022

Jonathan Bennett, Chief Commercial Officer

Jonathan Bennett

Chief Commercial Officer

The smartphone and new digital payment infrastructure models are at the center of a mobile commerce revolution that is giving merchants and consumers all over the world the opportunity to buy and sell goods and services that they would otherwise have struggled to access, according to experts attending this month’s Mobile World Congress event in Barcelona.

Jim McKelvey is the co-founder and director of US financial services and digital payments company Block, formerly Square. Square rebranded itself in December to better reflect the broader scope of its product and service portfolioi. He had founded Square alongside fellow entrepreneur and former Twitter CEO Jack Dorsey in 2009 after he found it difficult to sell his glassware online due to issues with accepting Mastercard and Visa credit card payments.

Block subsequently made its name by creating a platform that aggregated merchant services and mobile payments into a single interface that allowed them to accept those credit card payments more efficiently while simultaneously tracking their sales and inventory and helping them to obtain financing. The company expanded its proposition into Spain in January this yearii, providing its high volume of small businesses with a wide range of software, hardware, and payment solutions designed to help them quickly set up digital payments infrastructure. McKelvey says that before the pandemic, 70% of financial transactions conducted in Spain were in cash, which has since fallen to 54%.

“Now they have the same hardware, software, and omnichannel products have had for decades – we have given them the tools to punch above their weight,” he said.

Block and other fintechs have also pushed traditional banks to raise their own game to facilitate flexible digital payments. José Ignacio Goirigolzarri has served as the executive chairman at Caixabank, one of the biggest retail banks in Spain and Portugal, since late 2021. He acknowledges the profound changes in the banking sector driven by new technology over the past decade, particularly when it comes to the digitalization of the distribution model, competition from new, more nimble players, and the increasing relevance of digital ethics.

“Competition is good for the market, customer choice, and drive innovation,” he said. “New players bring valuable propositions to the table, and the sector must respond with humility and ambition and adopt many of the same practices. When people talk about new players, they assume the incumbents cannot stand the competition, but traditional banks are making huge efforts to adapt.”

Smartphones enabling art auctions and ownership

Mobile commerce is also reaching some unexpected corners of the global economy as buyers and sellers switch on to the new realities of the digital world. Charles F. Stewart is CEO at Sotheby’s, one of the world’s oldest auction houses. He believes the smartphone, combined with digital payments, blockchain, and non-fungible tokens (NFTs), is revolutionizing how people access, purchase, and collect art.

“In the old days, people we [the auction industry] was a physical marketplace, then we went to a digital marketplace, and then a hybrid world where millions of viewers can see the sale of a Monet painting being broadcast from London,” said Stewart. “That is an example of mobile expanding the traditional audience and access to exceptional art in a quantum way.”

Sotheby’s is already selling NFT-based art, including a CryptoPunk designed by Larva Labs and authenticated by Blockchain for US$11.8m, as well as Tim Berners-Lee’s source code for the Internet (US$5.4m), in June last yeariii. Stewart says that the combination of collectible art, which can be shown on a digital screen anywhere and multiple locations simultaneously, is a big draw alongside flexible digital payment and funding options that allow people to own unique artifacts collectively.

“Blockchain offers new ways to collect, and you don’t need to be a billionaire to enter the market,” he explained. “A mobile device can give you a fractional ownership of art, which is a powerful trend that we will see more of in 2022”.

Mobile payments technology has moved on since Jim McKelvey was selling ornaments from his glass-blowing studio in the 1980s and 1990s and looking to improve online merchants’ access to the financial system. However, the underlying enabler is still the same.

“Mobile is at our core, and the smartphone is central,” added McKelvey. “Everyone is carrying one, so people need to be able to transact on this device seamlessly to liberate them from any form of geographic constraint.”

[i] Here’s Why I Love That Square Changed Its Name to Block, The Motley Fool, 22nd December 2021

[ii] Square announces official launch in Spain after successful Early Access Programme, Square, 25th January 2022

[iii] ‘CryptoPunk’ NFT sells for $11.8 million at Sotheby’s, Reuters, 10th June 2021

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