Last year, I was engaged in evaluation Mcommerce deployment for a large integrated Telco. I found that it’s an interesting field with good revenue opportunities. But there are various uncertainties in mobile payment value chain.
Here, I will discuss about current status & future of mobile payment.
Technology is a leveler. Costs of smartphones are decreasing but features are increasing. Next year’s $100 phone is this year’s $400 phone.
Actually today people are using mobile phones within price range $100 to $150. Andy Rubin revealed last year that about 850,000 Android devices are activated every day, reaching a total of 300 million so far, and there are 450,000 apps in the Android Market. Once people get Smartphone in the range of $70, a new huge market will open up.
Telecom operators believe that pay by mobile phone will be a new revenue opportunities for Telecom operators. It is estimated that 1.4 billion people will use cell phones to remit money domestically and across borders by 2015.
The promise of mobile phone financial services lies in their delivery platform. Mobile phones are unrestrained by the infrastructural and cost requirements that have traditionally hindered banks and others from reaching the impoverished.
1. In India, Movida, a mobile payments joint venture backed by Visa and Monitise, has signed an agreement with India's HDFC Bank to introduce mobile payment services. The new service allows HDFC Bank customers to pay bills, top up prepaid airtime and buy tickets from their mobile phone and is designed to operate across all mobile networks using any Visa and non-Visa branded payment account.
2. Sweden's four mobile networks -- Telenor, Telia, Tele2 and 3 -- have formed a joint venture to handle mobile payment services. The jointly owned company is expected to launch commercial services around 2013..
Today hundreds of thousands of Swedes paying their public transport travel or parking using their mobile phone and the goal of operators’ collaboration is that the cell phone will be used for more transactions. For customers, this means that all mobile operators have the same solution, which facilitates, for example, when changing mobile operator.
(1) ¬Operators must rethink their traditional role in the mobile payments value chain in order to remain relevant, according to Ovum. Despite operators' belief that mobile wallet services will keep them centre stage in the value chain, growing competition and the threat of rival services from powerful over-the-top (OTT) players and other parties means this will not be the case for most.
A new report from the telecoms analysts reveals that one of the most difficult challenges for operators’ will be from those OTT players offering mobile wallet services free to end users and merchants, shifting the business model to mobile advertising where operators have little or no experience.
"This is exactly what Google is aiming to do with its mobile wallet service and if it gains critical mass then it will have a disruptive impact on operators," says Eden Zoller, principal analyst and report author. "It will also make the SIM rental model being explored by operators more difficult to sustain."
(2)There are also fundamental questions about how substantial revenues from such large scale collaborative ventures can be when revenues have to be shared between an increasing numbers of parties. Another issue faced by large scale operator collaborations is regulatory scrutiny on anti-trust grounds.
(3) A new survey conducted by Radius Global Market Research shows that the majority of Americans remain quite skeptical of mobile payment services and in the near-term are not likely to give up traditional forms of payment.
"There's been a lot of speculation about how quickly consumers are moving to a wallet-less existence. Based on our recent survey, it won't be anytime soon," says Chip Lister, Managing Director of Radius. "The benefits of convenience, speed, and portability, are resonating with a niche population of younger consumers. But even with this segment there are important obstacles that must be addressed before pay-by-smartphone technologies will be widely adopted as a replacement to more traditional modes of payments."
Security tops the list of consumer concerns about mobile payments. Half of all American consumers say potential security and fraud significantly influence their likelihood to use smartphone technology to make purchases in the future. In comparison, only 14% say security and fraud don't influence their future likelihood to make those purchases.
Interestingly, the segment most likely to make purchases via smartphone, consumers under 35 and those identifying as digitally savvy, are also the most likely to be concerned with security and fraud issues. Fifty-four percent of consumers under the age of 35 are concerned with fraud. That figure rises to 62% among digitally savvy consumers.
(4) Concerns on money laundering and terrorist financing risks have made identifying the actual risks an even more daunting task.
"One way of adding value is to act as a facilitator for card issuers that could see operators provisioning cards virtually or via stores, helping with authorization by distributing cards to verified users on their own networks, leveraging customer data from user accounts and credit checks," explains Zoller. "This will be invaluable to credit card issuers struggling to obtain reliable user data/ identification on potential owners of cards and the service described could save card issuers time and money."
Google, PayPal and major credit companies are all making land-grabs for the emerging mobile payments industry. Mobile carriers — used to controlling profits made from mobile phones — want to avoid being squeezed out.
A startup called BOKU, brings a mobile payment solution that could satisfy all sides. The product, BOKU
Accounts, works like a debit card issued by your mobile carrier instead of your bank. Users receive an NFC-enabled sticker they can attach to any phone — as well as a mobile-carrier-branded MasterCard. BOKU’s value proposition is this: it’s a mobile payment system not tied to specific phones or terminals.
Unlike Google Wallet, which requires an NFC-enabled phone, or the PayPal wallet, which requires merchants to install a software upgrade in their terminals, BOKU works with whatever hardware each party in the transaction happens to have. If the retailer’s terminal isn’t NFC-enabled, that means the customer is just swiping a regular credit card.
Here, I will discuss about current status & future of mobile payment.
Technology is a leveler. Costs of smartphones are decreasing but features are increasing. Next year’s $100 phone is this year’s $400 phone.
Actually today people are using mobile phones within price range $100 to $150. Andy Rubin revealed last year that about 850,000 Android devices are activated every day, reaching a total of 300 million so far, and there are 450,000 apps in the Android Market. Once people get Smartphone in the range of $70, a new huge market will open up.
Telecom operators believe that pay by mobile phone will be a new revenue opportunities for Telecom operators. It is estimated that 1.4 billion people will use cell phones to remit money domestically and across borders by 2015.
The promise of mobile phone financial services lies in their delivery platform. Mobile phones are unrestrained by the infrastructural and cost requirements that have traditionally hindered banks and others from reaching the impoverished.
How mobile payment services set up in various countries?
2. Sweden's four mobile networks -- Telenor, Telia, Tele2 and 3 -- have formed a joint venture to handle mobile payment services. The jointly owned company is expected to launch commercial services around 2013..
Today hundreds of thousands of Swedes paying their public transport travel or parking using their mobile phone and the goal of operators’ collaboration is that the cell phone will be used for more transactions. For customers, this means that all mobile operators have the same solution, which facilitates, for example, when changing mobile operator.
What are the challenges to the operator’s collaborative model of working
A new report from the telecoms analysts reveals that one of the most difficult challenges for operators’ will be from those OTT players offering mobile wallet services free to end users and merchants, shifting the business model to mobile advertising where operators have little or no experience.
"This is exactly what Google is aiming to do with its mobile wallet service and if it gains critical mass then it will have a disruptive impact on operators," says Eden Zoller, principal analyst and report author. "It will also make the SIM rental model being explored by operators more difficult to sustain."
(2)There are also fundamental questions about how substantial revenues from such large scale collaborative ventures can be when revenues have to be shared between an increasing numbers of parties. Another issue faced by large scale operator collaborations is regulatory scrutiny on anti-trust grounds.
(3) A new survey conducted by Radius Global Market Research shows that the majority of Americans remain quite skeptical of mobile payment services and in the near-term are not likely to give up traditional forms of payment.
"There's been a lot of speculation about how quickly consumers are moving to a wallet-less existence. Based on our recent survey, it won't be anytime soon," says Chip Lister, Managing Director of Radius. "The benefits of convenience, speed, and portability, are resonating with a niche population of younger consumers. But even with this segment there are important obstacles that must be addressed before pay-by-smartphone technologies will be widely adopted as a replacement to more traditional modes of payments."
Security tops the list of consumer concerns about mobile payments. Half of all American consumers say potential security and fraud significantly influence their likelihood to use smartphone technology to make purchases in the future. In comparison, only 14% say security and fraud don't influence their future likelihood to make those purchases.
Interestingly, the segment most likely to make purchases via smartphone, consumers under 35 and those identifying as digitally savvy, are also the most likely to be concerned with security and fraud issues. Fifty-four percent of consumers under the age of 35 are concerned with fraud. That figure rises to 62% among digitally savvy consumers.
(4) Concerns on money laundering and terrorist financing risks have made identifying the actual risks an even more daunting task.
How operators can add value?
Is BOKU the future mobile gateway?
A startup called BOKU, brings a mobile payment solution that could satisfy all sides. The product, BOKU
Accounts, works like a debit card issued by your mobile carrier instead of your bank. Users receive an NFC-enabled sticker they can attach to any phone — as well as a mobile-carrier-branded MasterCard. BOKU’s value proposition is this: it’s a mobile payment system not tied to specific phones or terminals.
Unlike Google Wallet, which requires an NFC-enabled phone, or the PayPal wallet, which requires merchants to install a software upgrade in their terminals, BOKU works with whatever hardware each party in the transaction happens to have. If the retailer’s terminal isn’t NFC-enabled, that means the customer is just swiping a regular credit card.
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