Emerging players in theM-Commerce marketVishal Jain, Analyst, Mobile ServicesThe 451 Group
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Agenda• Introduction to context of mobile commerce and payments• Expanding scope of mobile commerce opportunity• Emerging players and their business model• Evolving nature of mobile advertising leading to payments• Trends and Implications
Whose payments is it anyways• Not so long ago - Mobile banking was seen as a harbinger of mobilepayments Carriers Banks• However, its emerging into a wider context• New entrants are making payments a part of their servicesecosystem
Mobile commerce – starts with payments New marketplaces“By breaking the market boundaries of theaterand circus, Cirque du Soleil gained a newunderstanding not only of circus customers butalso of circus noncustomers: adult theatercustomers.” – W. Chan Kim and ReneeMauborgne, Blue Ocean Strategy
Mobile commerce – starts with payments New marketplaces• Around 150 (451 Group estimates) mobile payment startups with more than $500m in VC/PE money• PayPal to top $3bn in mobile payments volume• Apple iTunes reports $1.4bn revenue in Q2 2011• M-Pesa contributed 13% to Safaricom’s revenues for 2010
Mobile commerce – starts with payments New marketplaces The Handwriting on the Wall• Around 150 (451 Group estimates for WE and US) mobile payment startups with more than $500m in VC/PE money• PayPal to top $3bn in mobile payments volume• Apple iTunes reports $1.4bn revenue in Q2 2011• M-Pesa contributed 13% to Safaricom’s revenues for 2010 “The quicker you let go of old cheese, the sooner you can enjoy new cheese” - Dr. Spencer Johnson, Who Moved My Cheese
Mobile commerce – starts with payments New marketplaces The Handwriting on the Wall• Around 150 (451 Group estimates) mobile • Visa Europe commits €100m for mobile payment startups with more than $500m in payments VC/PE money • Major banks across US and Europe form• PayPal to top $3bn in mobile payments consortium for mobile payments volume • US Carriers commit $100m for mobile• Apple iTunes reports $1.4bn revenue in Q2 payments 2011• M-Pesa contributed 13% to Safaricom’s revenues for 2010
Mobile commerce opportunityHigher Digital + Physical Content In-store purchasescomplexity Real time offers Coupons/Offers Financial Ticketing Services Digital Content Web app In-app Apps content content Location- Games Features based/targeted Books Video Newspaper Music Potential VAS/WAP Content Addressable Wallpapers Scores Opportunity Present Ringtones Voting OpportunityLow News feeds Screensavercomplexity Low Value High Value Price per unit
Alternative payment chainInitiating channel Transaction Account Identifier Clearing account currency Credit card Card network E-money Debit cardMobile phone CarrierCards/fobs/etc Virtual Email/phone/ currency Id etc WalletDirect channels operator Money Pre-paid equivalent account Bank Bank Account
Emerging players and their charging and billing methods• Virtual currency going beyond virtual items• Pre-loaded wallet – build an ecosystem around it• Talk time as a global instrument – for remittances• Directly linked to bank account , phone bill or cardaccount• Embedded payments – inside the browser but linked tocard or bank account• Loyalty is the next big payment engine – well entrenchedand understood – but new form factors
Which model to follow – Different pricing regimes Paypal Google Amazon Checkout MPS • Quick setup and low fees Merchant 1.4% to 1.4% to 1.5% to but why charge higher for account 3.4% + 3.4% + 2.9% + fees £0.20 £0.20 $0.01 to $ low volume 0.30 Facebook iTunes• Amazon vs. Facebook and Apple Credits 30% per 30% per• Premium for ecosystem redemption redemption• Low fees but merchant accounts setup Carriers Online merchantthe online way have to go through the account for accepting cardstime consuming set up process 5% to 30% 2% to 4% + fixed fee + monthly fee + setupMicro+ payments – right mix? fees
Simplicity- equivalent of a card swipe and cash By offeringMerchants Consumers• Quicker on-boarding and • Reduce the amount of informationintegration required to purchase• Stop fee loss to traditional • Enable new touch points – QR,payment methods NFC for P2P, P2M environments• Track User purchasingbehavior • Load offers and promotions• Open new channels• Monetise assets Target cash and card volumes +
Mobile advertising has built the ecosystem for payments Offer marketing App marketing Product marketing In-App upgrades Brand advertising Lead generation
Incumbents will leverage relationships driven by needs Expanding monetisation opportunities forPublishers/Developers developers Advertising Networks Development platforms Content aggregators OEMs Carriers App stores Services PlatformsConsumers Expanding their digital ecosystem for business opportunities
By enabling mobile payments Embed into the browser or app Attach/Embed the POS Advertising + into the device Coupons Redeem Offers And/or Purchase NFC QR New touch form + Bluetooth factors – for seamless Camera redemption andOffers Initiated from – app, Audio purchasessocial network, navigation app, Voicesearch, SMS, proximity scan
Market movements around mobile paymentsMarket entrants Acquirer TargetMobile payments Mobile Interactive Group ZayPayacquisitions eBay-PayPal Zong, Fig Card Google Zetawire Proxama Hypertag Neomobile OnebipMarket launch Lead Provider Product launch/partnershipMobile payment product InMobi SmartPaylaunches Blackberry Messenger Mobile gifting Opera Software, Blackberry with Bango App World Android Market with carriers
Mobile commerce is pervasive Trends Reason Implication Its just not app stores but severalBoundaries of Expanding scope of mobile other entities that are vying to sellmobile commerce outside the app store goods, content and therefore need acommerce ecosystem mobile payments option.Content Payments will have to be right Are payment options on existing+ Payment sized for the mobile medium and platforms suitable for the contentfederation transactions being sold? Need for an end to end interface New players are building criticalSmartphone is blocks, beyond content, to sustainthe media and that rolls in advertising, offers and user affinity – identity, payments,channel payments into one advertising.
Thank You Questions? ? Vishal.email@example.com
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