By Daniel Hunter

With Apple set to launch its mobile payment system Apple Pay this month, a report has suggested that we could've been using the technology for as long as 15 years, if it wasn't for "boardroom egos".

Squabbling and a lack of compromise among collaborating dominant industry groups has stunted the growth of mobile payment according to Pinar Ozcan, an Assistant Professor of Strategic Management at Warwick Business School, and Dr Filipe Santos, of INSEAD.

In their research paper, The Market That Never Was: Turf Wars And Failed Alliances In Mobile Payments due to be published in the Strategic Management Journal, the pair point out that in 2006 the mobile payment market had already been in the media spotlight for close to five years. Despite the technology being readily available and a strong demand, however, the market has been incredibly slow to materialise.

Dr Ozcan said: “Finally the Western world will have mobile payment thanks to Apple, but we could all have had this a long time ago if it wasn’t for a clash of egos.

“The mobile payment industry is a perfect example of titans in different industries clashing over a new concept. Often firms from distinct industries have difficulty reaching an agreement to launch a new market due to a history of dominance in their own industry and lack of joint collaboration experience.

“This lack of agreement in turn leads to a weak compromise on market architecture with unresolved interdependence. This creates a vicious cycle where other players hold off investments in market infrastructure and, in turn, the disagreeing parties lose any incentive to work on an agreement because the market is not taking off.”

Dr Ozcan added: “Overall, almost 10 years after the first discussions on mobile payments began, and five years after the technology became ready for deployment, the key players failed to agree on the market architecture due to disagreements on who would control the customer relationship.

“This disagreement then extended to the responsibility for securing the transaction, but the companies eventually lost interest and looked elsewhere.

“Our data shows that the longer the players from distinct industries disagree about the market architecture, the more likely they are to invest in alternative architectures within their own industry, further inhibiting market emergence at the convergence of industries at both global and local levels.

“Whether Apple Pay is finally the service which cracks the mobile payment industry and brings the cross-industry squabbling to an end, while at the same time paving the way for a true emergence of a technology touted for years as the next big thing, remains to be seen.”

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