ContentsSome thoughts on paradigm shiftsRe-thinking the nature of transactions and transaction actorsProximity mobile payments: card emulation or not? 3 case studies from The Netherlands to validate consumer acceptance of NFCRebooting the conversation from a consumer point-of-viewWhat do we expect from a wallet, or a payment instrument?Is NFC a “tech-push’ or a “consumer pull’?How to differentiate with NFC?1 case study from Rwanda, where cards and card acceptance are virtually nonexistant
So I was thinking about some of the old conceptions of “e-commerce” and the “e-wallet” that we used to have at Netscape and MCI (1994-1996), when we were first deploying HTTPS.
MNOs tend to generate their revenues from “transaction-based business” (sale of SMS, data, voice calls), whereas margins on actual “transactions” for banks are thinning in most markets, and in some cases unprofitable in general.For banks, the question about the value of payments services is a burning one these days – especially for developed world banks, but also for the developing world as well.Deposit-taking and lending are major differentiating business lines of banks, although some MNOs and other parties are starting to make moves in this direction.
“Pinnen met je mobiel” retail shopping and payments trial using contactless PIN (NL direct debit) from Aug 2007- Feb 2008 Payment with a secure application on the mobile phone (Samsung x700)Also featured storage of value for recycled bottles on the phone – save your value, cash it in or donate it.Highly successful trial, proven consumer acceptance/trust a mobile as secure debit card replacement.
Proof-of-concept programme for NFC payment for soft drinks using MiniTixPartners: Capgemini, Coca-Cola, Rabo Mobiel, Yoonison, MiniTixBeginning in Apr 2007, 30 locations nation-wideProof-of-concept ‘Kroketjeuit de muur’ met je telefoon, Oct-Nov 2007 Capgemini, FEBO and Mertens GroupMiniTix NFC trial in Amsterdam (NFC mobile phones, cards)Proof-of-concept programme to explore cash management, saves coin traffic, fraud management
Major Dutch retailer Albert Heijn wanted to trial a new retail formula in their “To Go” storesNFC shelf-level tag shopping, as customer filled her basketCustomer built up a list of what they were buying, and performed self-checkout without queuing at busy store countersDiscounts and specials applied automaticallyReceipt can be printed upon existOccasional control checks to validate purchases
Mobile Convention Amsterdam - 22 May 2013
The Consumer Side of NFC and Mobile PaymentsMobile Convention Amsterdam (22 May 2013)Dan Armstrong (firstname.lastname@example.org)
Speed & efficiency Global markets Products & choices Comparison, reviews The long tail Social media Viral movements & news Monetising clicks Spam PornThe e-commerce shake out
… 2 fundamental types of transaction players?Transactions are theChannel”I have a pipe and/or network and I want to monetise theinvestments I made in creating it.””I want as much to get through that pipe and the (mobile)phones accessing it as possible.”Transactions via theChannel”I have stuff I want to do via channels. Enable my consumers tocontrol their bank account, make a payment, get a ticket, see anad, save or use loyalty points, etc.””I need as many (cost effective) channels and pipes to do it.”
How shall we define “transaction”?Bank Account ValueTransfer, PaymentsValue Depletion,Prepaid, Wallets,TransportationLoyalty, Points,Coupons,TransformationMomentsEyeballs, Trust,Engagement, Action<?>
50% of consumers will pay more for products they trust 78% of consumers will look first to trusted brands whenin need of products or services 78% of consumers are willing to give trusted brands achance, even if unsure of what value the product orservice will bring to them 82% of consumers will choose to use a trusted brand’sproducts or services frequently, rather than movebetween brands 83% of consumers will recommend a trusted brand toothers, often un-promptedTrust?Concerto Marketing Group, Vancouver BC, Canada / Ontrack Advisory, Singapore (April 2013)
2 Popular Starting Points for Mobile Proximity PaymentsCard Emulation Bypass Card Emulation Phone takes the place of aphysical card to transact at aphysical merchant location Consumers are comfortablewith card operating models Standardisation and ubiquityof acceptance points a mustfor economies of scale Requires compatiblecard/mobile acceptanceinfrastructure Trigger remote payment withphone (apps, other manner) Confirmation can be pushed tomerchant, but how to localisethe payment location withoutNFC? Receipt can be printed at POS Latency in making paymentthis way vs. cards EMV / secure PIN keypad Card acceptance still required
Proximity PaymentsOfflineCounterEnablesPaymentvalue on the card value in “the cloud’MobileAuthenticationEnablesPaymentcard-emulationbypasscard-emulationCardAuthenticationEnablesPayment
Mobile NFC PIN Emulation Trial @ C1000 (2007-2008)
Mobile NFC for Low-Value Payments in Vending (2007-08)
NFC Mobile as Retail Shopping Tool, Issued Device & AcceptancePoint @ AH To-Go (2008)
What do we expect from a wallet? A place to store cash? A place to store paymenttokens? A place to store other tokens? A personal object? A private object? Something small enough tobe portable/mobile? … but … do we need aphysical object?
Then, what do we expect from a transaction device? Identification of myself, myrights and capabilities,memberships. Identification of myself, anauthentication tool forpayment. Secure, multi-factor Tamper-resistant/evident Personal and private Easy to use … but … do we need aphysical object?
Consumers seem to love and trust it• But who will pay for it’s implementation … merchants, banks, mobileoperators, handset manufacturers? Given the “app revolution” in so many of our markets,what value does NFC bring to payments?• Convenience?• Put all cards in one apparatus?The phone-shaped wallet ..• Addiction to mobile phones, butnot to our wallets?• Leave cards at home?• Add value to transactions?The Consumer’s Perspective on NFC?
Cards seem to be entrenched in many markets (like NL),and are likely to remain in play for the foreseeablefuture, simply increasing the issuer and acquirer costs. But, is NFC is fundamentally different from previoussteps forward in functionality .. ?The Consumer’s Perspective on NFC?SMS Mobile DataAppsOnline Shopping& Payment
Virtualisation benefits are clear, from the business POV ..0501001502002503003504004505001980 1985 1990 1995 2000 2005 2010*1millionContacts viadevices (e.g. webbrowser/internet, mobile phone, IVR)Total Customer ContactsContact via abankadvisor, bankbranch
The case is clear for our creativity to make virtualisedecosystems work. But it will take a lot more creativity, usability and valueto become a real business driver. And for banks, they also need to achieve this withoutsacrificing trust, security, longer-term relationships,and (a certain degree of) transparency.Virtualisation benefits are clear, from the business POV ..InformationSome Branchesor a WebsiteTrust
For your consideration .. impulse purchase / spam