17 dec bt online_digital, not mobile, wallets key to mobile commerce
Client : PayPal Country : SingaporePublication : The Business TimesDate : 17 December 2012Topic : Digital, not mobile, wallets key to mobile commerceURL : http://www.businesstimes.com.sg/print/368415Visitorship : 508,410 (Site-wide)
PUBLISHED DECEMBER 17, 2012Digital, not mobile, wallets key to mobile commerceBYRAHUL SHINGHALTHE highly anticipated iPhone 5 has now been in the Singapore market for several weeks, andthe new iPad mini has just arrived. Those watching the mobile payment space have observedthat neither device carries an NFC (Near Field Communication) chip as a new feature.NFC has been the buzzword for some time now, and many would have expected the latestiPhone and iPads to be NFC-enabled - supporting the concept of a "mobile wallet". Thequestion, then, is: Is NFC the key to mobile payments?For us, the answer is no. NFC is an interesting technology that enables communicationbetween two devices that are close to each other. It is a way for people to pay and get paid,but thats all it is - a technology, not a strategy.Many are saying that once NFC is in full swing, it will lead the mobile commerce revolution,but as far as were concerned, the mobile commerce revolution is happening right now.According to our data, 2012 is going to be a huge year for mobile commerce - without anyNFC. The PayPal Online and Mobile Shopping Insights 2011 study conducted by Nielsen foundthat mobile commerce comprised about a quarter of online shopping in Singapore, more thanfive times its share in 2010. Mobile shopping spend grew from $43 million in 2010 to $328million, representing a 660 per cent jump in just one year.Were seeing more of the same around the world. We have projected that PayPal wouldprocess US$10 billion globally in mobile payment volume this year. Thats an amazing 70xincrease from the US$150 million in mobile payments we processed in 2009, just three yearsago. PayPal has over 17 million customers around the world making a purchase through theirmobile phone which is more than double what we had a year back.The rapid increase in consumers taking to mobile shopping and the success of PayPalsmobile-optimised checkout flows have contributed to these impressive figures. With aburgeoning smartphone and tablet market driving mobile transactions, PayPal expects mobilepayments to shape the future of commerce and that future is happening now.
Mobile vs digital walletsWhat form of mobile payment will drive the future of commerce? Many people use the terms"mobile wallet" and "digital wallet" interchangeably and further confuse the already-limitedidea of a mobile wallet by equating it with NFC.The term mobile wallet is one of the most misused terms in the history of technology. Thecommonly used definition of a mobile wallet refers to when all of your financial information,such as bank account and credit card numbers, are stored on the mobile device, and you needto have the device with you for the transaction to be possible. That is when NFC is used tofacilitate payments with the proximity of the smartphone and the payment machine.On the other hand, digital wallets exist in the cloud. They are not bound to one specific devicesuch as a mobile phone, but are accessible from a variety of devices (laptop, iPad, ultrabook,Xbox, to name a few) and in a number of ways. Sensitive financial information is stored in thecloud, not on the actual device.Consumers are able to make mobile payments even without NFC. The cloud approach ensuresa seamless, connected experience that follows consumers wherever they go and feeds themwhat they want, when they want it. Putting your wallet in the cloud, and making it smartenough to work out the best way to pay for you, solves a real consumer problem that mobilewallets simply do not.Clear trendThe commerce trend is clear - mobile devices are changing the way consumers in Singaporeshop and pay today. To stay ahead of the curve, businesses should adapt quickly and offer asolution that meets the needs of their increasingly mobile-centric consumers.Developing a smartphone app is a key way of engaging consumers and offering innovativeways to shop and pay. The Sprooki iPhone app, for example, notifies shoppers of the latestpromotions in nearby malls and retail outlets. They can purchase products in-app, and collectthem at the store. FarEastFlora.coms SG Florist app gives consumers real-time access to over1,000 choices in flowers, gifts, plants and hampers, and provides reminders ahead of specialoccasions.Smaller businesses that find it restrictive to invest in app development should considercreating a mobile version of their website. Websites such as Agoda and BestOfferBuy noticethat you are viewing their content from a mobile device and adapt the experience to make itmobile-friendly without needing to "pinch and scroll" in order to navigate the site.QR-codes are a new, innovative form of mobile shopping when linked to a digital wallet. Anexample of this is the PayPal-enabled QR code shopping at SMRT stations, which saw anaverage of 500 transactions per 10,000 scans by commuters.
One of the participating merchants, Showbiz Asia, saw huge mobile sales success as theyreceived a five-fold increase in mobile ticket sales, compared to sales for the same period pre-campaign. The QR-code shopping campaign enabled consumers to quickly pay in as little astwo clicks on a small mobile screen.Without a doubt, simplicity and security are the keys to designing a consumer-friendly mobilepayment solution. For many people, the task of entering a 16-digit credit card number, anexpiry date, and a CCV number is enough to make them drop out of the conversion flow,especially if they are on the move.People are also concerned about losing their phones and the personal or financial data itcontains. The "digital wallet" approach relies on the inherent security of the cloud, and aconsumers financial information is stored in the cloud, not on the phone. Even if the phone islost or stolen, there is no need to worry about losing your digital money.The writer is director of mobile commerce, PayPal Asia Pacific