M-Commerce World Summit 2011 - Introduction

M-Commerce WorldSummit 2011
06-07 April, Singapore

Mobile Banking and Payments are Mainstream

Mobile Banking and Payments are Mainstream
Mobile Banking
Approximately 700-800 banks with mobile banking applications live in the marketplace right now.
Popular channels include: SMS, USSD, SIM Toolkit, Mobile Web/WAP, Apps, IVR, IVR call-back
Mobile Payments
Payment @ Distance Models: SMS, USSD, SIM Toolkit, direct mobile billing/PSP billing, direct operator billing, Mobile Web/WAP, Apps, Credit Card, online wallet systems, IVR, IVR call-back
Payment @ Proximity Models: (all of the above, plus…) NFC, RFID, Bluetooth, Zigbee, Wifi, IrDA, UWB, TransferJet, etc.
Combined market for all types of mobile payments is expected to reach more than $600B globally by 2013 (double of the current figure.
Mobile payment market for goods and services, excluding contactless NFC transactions and money transfers, is expected to exceed $300B globally by 2013.
Mobile Money
Dozens of GSM operators world-wide providing money transfer, payments and prepaid services.
Mobile Banking is growing in popularity in all markets

Rabobank Mobielbankieren : Usage in 2010
HUGE growth in mobilebankieren with the launch of “Apps” in place of WAP-based mobilebankieren
2006-2009 level

But what are we talking about?
IVR Banking & Payments
SMS Account Activity Alerts
Multi-ChannelBalance-Checking
Full-Service Mobile Banking
Remote Payments & Electronic Wallets
Mobile Contactless / Proximity Payments
“Mobile Money”
Mobile Remittances
???
= banks deploy
= public transportation-led models
= bank-led models
= cooperative models
= mobile operators deploy
= third-parties deploy
= mobile operator-led models

There are plenty of possibilities and combinations.

How do we characterise these guys?

and of course, full-service mobile banking …

Mobile Banking and Payments SWOT
Opportunities
Low internet penetration & high mobile penetration make great MB opportunity
Other direct banks may not be highly active currently in MB
MB applicable to almost all segments, and certainly the high-growth areas (current, checking, savings, under-banked, other regions)
Bundled packages (e.g. incl. debit card) can be sold / distributed independent of branch locations
Strengths
Low-cost development
High scalability
Revenues and cost-savings possible
Innovative, cost-effective tool for bank customers
Bank “on the go” reinforces virtualisation (alternate channels) strategies
Great way to increase customer #s substantially
MB works well as bundled addition to almost all account types
Threats
Time-to-market critical, to maintain differentiation vs. other banks
Unilateral initiatives may be popular if pushed strongly. Banks must stay ahead/in-line with (e.g.) bill payment partners
Weaknesses
Bank / mobile operator product portfolio somewhat limited, thus limitations possible in MB functionality
Limited transaction account capability, so barrier to scale on transactions, if billed; however, customers expect MB for free, so no charging likely possible
Functionality of MB is extensive, but can never enable everything a bank would want to deliver
= especially for developing markets

Why do it?
Churn reduction?
Money transfer revenues?
Lack of infrastructure? (power, connectivity, computers)
Because our competitors were doing it?
Convenience?
… Banking the Unbanked? Hmm.
Not everyone is a sustainable banked customer (banks do have a bottom line)
You probably do, but let’s look at why do you need a bank account …
Is “Mobile Money” banking the unbanked?
Is the “consumer marketing” predilection and ATL marketing messages we are so quick to champion as “changing the rules for access to finance” actually doing us good in the long run?
SUGGESTIONS FOR THE CONFERENCE:
1.) Let’s explore our real motivations & associated benefits.
2.) Let’s look at the real revenue potential for MFS in our markets.

Some NFC Trials & Products: Ready for Prime Time?
= proposed for, or existing commercial roll-outs
Italy
France
USA
Netherlands
Czech Republic
Slovenia
France
Canada
United Kingdom
Georgia
South Korea
Japan
Netherlands
Netherlands
France
Poland
Switzerland
Spain
Guatemala
Spain
Turkey
Taiwan
Thailand
Singapore
Indonesia
Australia
Japan
Taiwan
Italy
Romania
Malaysia
Norway

Some NFC applications categories
1. Card Emulation Applications
replacing contact cards, magstripe, contact-chip cards, bar code products
payment cards
loyalty, discount and membership cards
access control (e.g. schools, office buildings, etc.)
public transportation cards
2. Elimination of Other Physical Goods
in lieu of paper tickets, coupons, etc.
coupons, in-store formulas and tours, bonuses, recommendations, “recycling receipts”, etc.
redemptions of other received mobile coupons or loyalty points
linked NFC applications between stores, locations and in time (“I was there and gathered points.”)
event ticketing, flight ticketing
tourist info., maps and recommendations
3. New Business Models
enabling new end-user tools by providing NFC-aware applications and intelligence in the mobile phone
smart-posters delivering information, coupons or links to end-users at specific locations
in-store shopping formulas (shopping lists, allergy warnings, recommendations for alt. products)
asset management applications, logistics apps
Location-based games using NFC
NFC P2P applications
4. Combinations w/Connectivity
1, 2 or 3 combined with a mobile application or online connectivity to all more value than a card transaction
triggers that provide value-added info. (e.g. membership levels, spending overview, etc.)
combining loyalty and special offers at POS moment (e.g. receiving a coupon based on profile, purchase)
combinations with other connected application features (shopping list + payment + loyalty)

Sea Change
Traditional Sea Changes (old school)
Fixed line telecommunications mobile
Usage of bank branches as cash in/out points ATMs and electronic funds transfer (EFT)
A new sea change? The “intelligence” in mobile phones
first generation mobile phones, address books, SIM card vs. handset – who owns the data? Nokia or SingTel?
App stores vs. operators? Will your bank issue your credit card in the future, or will T-Mobile or will the Apple Appstore?
NFC and the “secure element” – GSMA is pushing for SWP and the UICC as the SE choice, but with appstore dynamics and these consumer electronics manufacturers able to securely provision card personalisation information to NFC phones directly and world-wide, will the local MNOs be able to play a role? History says no, they will be always marginalised?
However, what of banks? How are national banking regulators going to deal with this?
SEA CHANGE
http://en.wikipedia.org/wiki/Sea_change_(transformation)

The Challenge: How to generate successful formulas?
Inexpensive, Standardised Savings Products
Currently has / uses another financial product
Redistribution Zone
Too poor
Target / Addressable Market
Excluded by design
Does not have access to the product
Agents, Branchless Banking, Mobile
Development Zone
Excluded by default
Does not have / use a financial product
Awareness & Usability Campaign
Does not want the product
Has access to the product, but does not use it
Enablement Zone
Potential users
Based on: http://www.bankablefrontier.com/assets/pdfs/access-frontier-as-tool.pdf

Have a great two days!
Dan Armstrong
Takashi Mobile | Financial Services
Rapenburgerplein 81
1011 VJ Amsterdam
The Netherlands
www.takashimobile.com
dan.armstrong@takashimobile.com
+31 652 085 071

M-Commerce World Summit 2011 - Introduction

by Dan Armstrong on Apr 05, 2011

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M-Commerce World Summit 2011 - Introduction — Presentation Transcript