2011 Mobile Money Forum – Event Summary The 2nd annual Mobile Money Forum hosted by Neotelis took place earlier this week on June 21st and 22nd at the Hyatt Regency Hotel in Montreal. The folks at Neotelis did a fabulous job of pulling together key participants from within the Canadian Mobile Money ecosystem as well as experts from other parts of the world. The conference spanned two full days and covered key Mobile Money topics including Mobile Commerce, Mobile & Contactless Payments, Mobile Wallets, and Mobile Money Transfer. The following are some common themes that arose in several of the sessions:
Mobile Contactless Payments (proximity payments) are still 1-2 years out. Much work has been done and several of the pieces are falling into place, but the ecosystem to support mobile contactless payments has not been completely flushed out at this point
Consumers don’t fully understand the concept of a Mobile Wallet or the value that it will bring to them. The value proposition for consumers needs to be very clear and well-communicated in order to initiate a change in consumer behavior
The conditions for Mobile Commerce are ripe, but there are still several hurdles to overcome, including Consumer Perception, Merchant Adoption, Operator Adoption, and Ecosystem Complexity
The mobile money ecosystem is currently very fragmented resulting in confusion for consumers. Retailers, service providers, financial institutions, etc. all have their own platforms and apps resulting in the consumer going to multiple places to conduct various mobile transactions
Day 1 Session Summaries: Keynote: Mobile Commerce & the New Payments Ecosystem Presented by: David Schropfer – The Luciano Group
What is Mobile Commerce:
Acquisition (Advertising)
Conversion (Loyalty)
Transaction (Payments)
The industry is poised to fundamentally modernize the payment experience and enhance the way that consumers, merchants and banks interact
There are over 2.1 Billion Loyalty / Reward accounts in North America
Convenience and Value-Add will attract the consumer
Breakage – percentage of net revenues for companies come from pre-paid cards / accounts such as Gift Cards, or loadable cards where the balance isn’t used. This is interestingly high E.g. 3.3 % for Starbucks
Mobile apps greatly reduce the cost for merchants (advertising, loyalty, payment)
Two points of vulnerability with Mobile Commerce are Privacy and Security
The Future of the Mobile Wallet in Canada Presented by: Christie Christelis – Technology Strategies International
A study of 1003 Canadians (both English & French) was conducted
The study provided consumers with a definition of a Mobile Wallet to get their perspective and interpretations:
What is it
How to use it
What can one do with it
What other value-add does it provide
Staggeringly low number of consumers indicated that they would use the mobile wallet for mobile payments (<19%)
Majority of consumers indicated that they would use a mobile wallet that is offered by a Bank (vs. Payment Network, MNO, Retailer etc.)
Discounts & Offers resonated most with consumers
Consumers are warm to the idea of a mobile wallet but there is not a lot of awareness and understanding of what it is
The success of the Mobile Wallet will come down to identifying and hitting the hidden drivers
Panel: Consumer Privacy & Mobile Money
Does the industry need new forms of regulation?
Canada has different legislation around privacy, making some US-based models inadequate for use in Canada
The consumer will be the driver of standards
There are a lot of dynamics of how payments will roll-out
There will be several different opt-in mechanisms around enrolling in these services
Visa & Mobile Contactless Payments Presented by: Derek Colfer – Visa Inc.
Canadian mobile landscape has changed significantly since 2009:
New operators have entered the market
New phones
New Infrastructure
Elements for success:
Contactless Issuance & Acceptance
Technology
Business Model
Trust & Security
Payment Experience
There is one Visa PayWave transaction every two seconds in Canada
Visa Digital Wallet: People will use because of their trust in Visa
$M$ Presented by: Bruce Burke – Gulf Bay Consulting
SMS is a $105 Billion business globally (2010 Revenue)
Economic structure is very digital based (or reliant)
FI’s are viewing Mobile Wallet services as high pioriity strategic projects
2010 CAGR for SMS is expected to be 54%
SMS is predicted to exceed 10 Trillion messages in 2013
SMS is used by 4.2 Billion consumes worldwide
Example Given: Murphy Oil: MurPay is a Text to Pay application linked to customer’s bank account.
It’s important to consider SMS in your mobile money deployment as it is clear that many consumers are still using phones that are not smartphones, and are using SMS quite extensively
Alternative Payment Approaches in Developed Markets Presented by: Vince Kadar – Telepin Software
Mobile Money Evolution:
E-voucher Distribution
Airtime Balance Transfer
Mobile Financial Services
Domestic Money Transfer
International Money Transfer
Mobile Commerce
Going from Domestic, closed-loop systems to global, connected services
Value Proposition to Consumers:
Simple to use
Convenience
Immediate
Increased Productivity
Entrepreneurship
Challenges:
Agent Network – growing a widespread distribution
Operator Network – growing the list of destination countries for recipients
Repeat Customers – growing stickiness to the service
New Customers – Building awareness of the availability of services
The Convergence of Payments & Media Presented by: Jean-Christophe Raynon – VeriFone Inc.
VeriFone believes that 2011 is the year for NFC
Projection – NFC enabled phone shipments could reach 100 Million units in 2011
NFC Solution #1 – Easy Coupon Redemption
NFC Solution #2 – Loyalty Program
NFC Solution #3 – Establishing Presence
Standards & Technology contribute to a complex & evolving world
VeriFone’s solution abstracts this complexity
The Future of Mobile Payments Presented by: Rodger Desai – Payfone Inc.
Consumers are ready for Mobile Payments
< 2 Billion people have credit cards and this is concentrated in 30 countries worldwide
This translates to <28% of the world’s population
> 70% of the world’s population have a mobile phone
Mobile Commerce Industry Challenges:
Consumer Perception
Merchant Adoption
Operator Adoption
Eco-System Complexity
Mobile Payments Innovation & Advancement
Open across device, OS, operator, merchants, financial solutions
Online, Wi-Fi, Tablet, Mobile
User Experience
New Tech Features, such as intelligent routing and variable price points
Manage Fraud
A Smarter Wallet for a Smarter Planet Presented by: Thomas Hissam - IBM
What if your wallet enriched the full purchasing life-cycle?
Where are the best prices?
Receive valuable coupons
Competitive data
Returns & warranty; keeps receipts
A smart mobile device becomes a smart wallet when industry stakeholders align around a TSM to enable it
Day 2 Session Summaries:
Case Study: Mobilizing Interact e-Transfer: Presented by: Alexander Chan – Central 1 Credit Union, and Andrew Ross – Interac Association / Acxsys Corporation
Interac accounts for 60% of card payment transactions in Canada
4 Billion transactions processed in 2010
Services: Debit, Cash, Chip, Online, e-Transfer, International
Mobilizing Interac e-Transfer
Anticipated to be a large part of the business in the future
Needed to be ubiquitous and consistent across and with other channels
Building on the banks’ mobile banking platform
Consumers should be able to transact how and when the want to
Using a mobile phone number
Central 1 Credit Union
$10B in assets
170 M in revenue in 2010
They do online and mobile banking and electronic payments
Launched text banking in Q1 2008 – send a txt msg command to retrieve balance etc.
iPhone web app launched in Q3 2008
Alerts launched in Q2 2009
Mobile Web – Q1 2010
Mobile P2P Payments – Q4 2010
Mobile Downloadable Apps – currently in progress
First to market with Interac e-Transfer for the mobile handset (Nov 2010) with Prospera Credit Union
Payment and software development expertise. They are a technology enabler
Prospera Credit Union – launched interact e-Transfer on mobile in Nov 2010 – first to launch
40% jump in volumes after launch
Have had very positive feedback
Saw an increase in mobile users
Cost of transfer – is set by the financial institutions; paid by the sender
Range in market is between FREE - $1.50 per transfer
Average $ value of transaction is north of $100
Starting M-Commerce Today: Presented by: Jim Brown - Admeris Admeris:
Provides:
Blackberry, iPhone, Android API’s
Authentication
Rendering
OneTouch Payment
Digital Signatures
Credit Card Storage
Fraud Scoring
Processing
Settlement
Daily Deposit of funds into Merchant Account
They authenticate down to the device level to enable billing to mobile account
Why m-commerce now?
By 2013 Google will see more traffic from mobile vs. PC – mobile transactions will follow
82% of smartphone users notice mobile ads
Best Practices
Discovery Drives Conversion
What is the customer doing, how are they interacting, when, and how are they responding/ discovering
Customer Experience – Make it Easier
Speed is paramount – simplified user exp leads to higher conversions. Focus on impulse and conveniences vs. in-depth shopping experiences
Is a login a necessity?
Give customers control with regards to whether they can opt-in to share additional info
Technology & Platforms – Make it Work and securely
Be prepared for constant change – customers change devices every 18-24 months which leads to the question – are you prepared to manage variations of apps or are you better off with HTML5 type of site
How are you protecting / securing information
How will you Integrate into existing infrastructure
Mobile NFC > Business as Usual for Payments? Presented by: Susan Mackeown – Interac Association / Acxsys Corporation Cornerstones of the industry:
Safe
Secure
Convenient
Efficient
Interac – Pay in a Flash
Rolling out later this year with Scotiabank and RBC
There is a huge opportunity to convert cash transactions to flash transactions
66% of transactions that take place are still done using cash
There is a shift in delivery of services – from organizations specifying how or what consumers use, to consumers choosing how and when they transact
Consumers
It’s my money - consumer
It’s my business - merchants
Loyalty
Consumers like to collect loyalty points / rewards
Risk – need to manage this
Liability – liability and risk management. What is the process when things go wrong?
Value –where is the real value in a transaction. Each part of the transaction needs to add value otherwise it shouldn’t be there
Panel: The evolution of mobile banking – leveraging the mobile channel Moderated by: Bob Egan – The Sepharim Group
Mobile brings context to the banking transaction
How to make mobile banking unique and different from internet banking
What are the new features that will be of value
Case Study: Making Business Payments Mobile Presented by: Brian Harris – Western Union Business Solutions Western Union
2010 Revenue 5.2B USD
Mobile Phones & remittances:
Current Customers: Percentage of WU Customers with a mobile phone
Senders - 86%
Receivers - 91%
WU Customer calls home an ave of 51.7 times a year
Western Union Business Solutions
Division of WU
$111 M in revenue in 2010
International Payments, FX
Operates in 9 Countries; on target for expansion to 14 by end of year
