Thoughts on the Mobile WalletLBMA EMEA ChapterAmsterdam, 21 March 2012Dan Armstrong (Takashi)dan.armstrong@takashimobile.com
marketplaceMCI (1994-96)
marketplaceMCI (1994-96)
1-800-MUSiC-NOW (1996)
The e-commerce shake out   Many shifting paradigms; however, once the supply chain and    logistics matched people’s awar...
What is the Mobile Wallet?
What is the Mobile Wallet?        IVR Banking &                              SMS Alerts                             Multi-...
So, taking a step back.
First of all, what do we expect from a wallet?   A place to store cash?   A place to store payment    tokens?   A place...
Then, what do we expect from a payment device?   Identification of myself, my    rights and capabilities,    memberships....
What are we doing when using cards, fobs, NFC cards?   Authorising transfers/payments    remotely of course …       •   P...
Innovative .. but card-based payments, for obvious reasons …Everyone’s got cards.                                      And...
NFC can be a bridging technology                                   But the Secure                                   Elemen...
Cardless payments, some people trying to figure out “proximity payments”without an additional token (like NFC or cards)   ...
Two ways I find handy of thinking about the mobile wallet ..               Card Emulation                                 ...
Two ways I find handy of thinking about the mobile wallet ..               Card Emulation                                 ...
But “collaboration” on mobile phone-based payments is tricky                 Category 1 Player:                           ...
In some places, we’ve not got a lot of smartphones ..How can we enable this merchant to accept mobile payments?     Limit...
Bank Branch: RwandaNo power, internet connectivity
Bank Branch: RwandaWaiting for cash withdrawals
Bank Branch: RwandaTeller
Bank Branch: RwandaTeller
Two ways I find handy of thinking about the mobile wallet ..               Card Emulation                                 ...
So, in Africa, South Asia, Southeast Asia perhaps …                                                Forget Cards         Li...
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Dan Armstrong - The Mobile Wallet - LBMA 2012

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As presented at LBMA Amsterdam Event March 21st, 2012

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  • 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.
  • Dan Armstrong - The Mobile Wallet - LBMA 2012

    1. 1. Thoughts on the Mobile WalletLBMA EMEA ChapterAmsterdam, 21 March 2012Dan Armstrong (Takashi)dan.armstrong@takashimobile.com
    2. 2. marketplaceMCI (1994-96)
    3. 3. marketplaceMCI (1994-96)
    4. 4. 1-800-MUSiC-NOW (1996)
    5. 5. The e-commerce shake out  Many shifting paradigms; however, once the supply chain and logistics matched people’s awareness, appetite and feelings of trust for e-commerce settled, clear winning business models emerged (my personal way of summarising): • Efficiency (Paypal, Netflix, online photo printing, online flight tickets/car rental/hotels, UPS/FedEx tracking, Amazon.com) • Products (HP, Netflix, Thomann.de, Amazon.com) • The Long Tail ( eBay, Marktplaats, publishing on demand, … and of course Amazon.com) • … plus of course, monetising clicks (Facebook, Google, YouTube, TripAdvisor, pornography)  Many of these internet-based e-commerce models began in the USA, but gained popularity in Western Europe and Asia, South America and are picking up somewhat in Africa and South Asia.  But internet transaction capability in Africa and South Asia is really taking off via mobile access.
    6. 6. What is the Mobile Wallet?
    7. 7. What is the Mobile Wallet? IVR Banking & SMS Alerts Multi-Channel Payments Balance-Checking Full-Service Mobile Remote Payments & Mobile Contactless / Banking & Payments Electronic Wallets Proximity Payments “Mobile Money” Mobile Remittances Advertising-led Models = banks deploy = bank-led models = cooperative models = public transportation-led models = mobile operator-led models = mobile operators deploy = third-parties deploy
    8. 8. So, taking a step back.
    9. 9. First of all, what do we expect from a wallet?  A place to store cash?  A place to store payment tokens?  A place to store other tokens?  A personal object?  A private object?  Something small enough to be portable/mobile?  … but … do we need a physical object?
    10. 10. Then, what do we expect from a payment device?  Identification of myself, my rights and capabilities, memberships.  Identification of myself, an authentication tool for payment.  Secure, multi-factor  Tamper-resistant/evident  Personal and private  Easy to use  … but … do we need a physical object?
    11. 11. What are we doing when using cards, fobs, NFC cards?  Authorising transfers/payments remotely of course … • Personal authorisation (machtiging) • Check • Signature • Card + Signature • Card + PIN • Card + PIN + Biometrics Four Corner Model • Card Three Corner Model • Biometrics • … you get the idea  Some payments are different, as they don’t always require a card in the first place for transaction, but other authentication (e.g. PayPal, MiniTix).
    12. 12. Innovative .. but card-based payments, for obvious reasons …Everyone’s got cards. And of course, allowing traditional credit card payments, without a card present ..
    13. 13. NFC can be a bridging technology But the Secure Element (SE) standardisations discussions have led to stalling the ubiquity of Single Wire Protocol- enabled phones and NFC acceptance devices world- wide since 2007.
    14. 14. Cardless payments, some people trying to figure out “proximity payments”without an additional token (like NFC or cards) WALLET But then again, if you were a merchant - you could also just say you accept PayPal too .. But the per transaction charges of moving online payment to the supermarket are usually prohibitive.
    15. 15. Two ways I find handy of thinking about the mobile wallet .. Card Emulation Forget Cards A mobile phone that takes the Next-generation authentication place of a physical card using that could leverage a POS for different authentication methods merchant speed and to enact a transaction at a vs. convenience, but doesn’t require physical location. one for payment. Can be EMVCo-based or New “opt-in” models required scheme-based, but allows the for auto-payment and phone to pay, like a super card. confirmations, transparency. • Can leverage the card/NFC POS locations. • Hard to forget the POS though. It’s what the Consumers are comfortable with cards. merchant needs to validate the payment quickly, and on-the-spot (see Square Card • Must face the standardisation jungle if the Case, later). phone is to co-exist at these acceptance points. • Consumers must feel like they are in control • Consumers don’t like to have loads of wallets, of the process. Otherwise its not to going to so this all has to be connected seamlessly on work. the back end.
    16. 16. Two ways I find handy of thinking about the mobile wallet .. Card Emulation With the ubiquity of A mobile phone that takes the cards in the place of a physical card using marketplace, and POS different authentication methods devices in place for to enact a transaction at a physical location. electronic payments, this is hard to ignore in Can be EMVCo-based or the EU, Asia, North scheme-based, but allows the America. phone to pay, like a super card. • Can leverage the card/NFC POS locations. Consumers are comfortable with cards. • Must face the standardisation jungle if the phone is to co-exist at these acceptance points. • Consumers don’t like to have loads of wallets, so this all has to be connected seamlessly on the back end.
    17. 17. But “collaboration” on mobile phone-based payments is tricky Category 1 Player: Category 2 Player: “I have a pipe and want to monetise my “I have stuff I want to do via channels. Make investments in my GSM license, radio and access payments, provide ticketing, sell ads, general network, etc. I want as much to get through that loyalty models, etc. and I need as many (cost pipe and my re-sold mobile phones as possible.” effective) channels and pipes to do it.”
    18. 18. In some places, we’ve not got a lot of smartphones ..How can we enable this merchant to accept mobile payments?  Limited smartphones  Limited (and expensive) mobile data  Limited (and expensive) fixed internet & electricity  Limited literacy  Limited trust in bank accounts  High cost of ATM and branch operations, limited in-country IT capabilities  Limited amount of people with official IDs  Everyone wants a payment card.
    19. 19. Bank Branch: RwandaNo power, internet connectivity
    20. 20. Bank Branch: RwandaWaiting for cash withdrawals
    21. 21. Bank Branch: RwandaTeller
    22. 22. Bank Branch: RwandaTeller
    23. 23. Two ways I find handy of thinking about the mobile wallet .. Card Emulation Forget Cards A mobile phone that takes the Next-generation authentication place of a physical card using that could leverage a POS for different authentication methods merchant speed and to enact a transaction at a vs. convenience, but doesn’t require physical location. one for payment. Can be EMVCo-based or New “opt-in” models required scheme-based, but allows the for auto-payment and phone to pay, like a super card. confirmations, transparency. • Can leverage the card/NFC POS locations. • Hard to forget the POS though. It’s what the Consumers are comfortable with cards. merchant needs to validate the payment quickly, and on-the-spot (see Square Card • Must face the standardisation jungle if the Case, later). phone is to co-exist at these acceptance points. • Consumers must feel like they are in control • Consumers don’t like to have loads of wallets, of the process. Otherwise its not to going to so this all has to be connected seamlessly on work. the back end.
    24. 24. So, in Africa, South Asia, Southeast Asia perhaps … Forget Cards Limited no. of POS in Next-generation authentication place, limited no. of that could leverage a POS for cards in the market. merchant speed and convenience, but doesn’t require Great opportunity for one for payment. mobile payments. But not via smartphones! New “opt-in” models required for auto-payment and confirmations, transparency. • Hard to forget the POS though. It’s what the merchant needs to validate the payment quickly, and on-the-spot (see Square Card Case, later). • Consumers must feel like they are in control of the process. Otherwise its not to going to work.
    25. 25. Thank You

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