Session Overview Insight into alternative payment methods that are in high demand by teens and tweens, as well as safety and privacy-oriented users who appreciate additional options when it comes to completing online transactions. How adopting a mobile payment solution can help drive spending and potentially increase customers.
Speaker Background Steve Klebe Steve has over 30 years of experience in sales, strategic alliances and product marketing in electronic payment, e- commerce, authentication and fraud prevention. Steve has previously worked at such companies as VeriFone, CyberSource, RSA and Vindicia. He put the original deal between Visa and CyberSource together 12 years ago resulting in an equity investment and a co- branded, co- He speaks at conferences regularly and recently spoke at the Game Developers Conference 2011 in San Francisco.
Financial grade payment platform.Direct connections with carrier billing systems.Proven to add incremental revenue by tapping into a large mobilesubscriber base.Leverages existing billing relationship and security.Enables consumers to charge purchases to their mobile bill.Hassel free - No enrollment, usernames/passwords needed tomake a payment.
Who We Are Danal BilltoMobile Technology proven over 10 years. Founded in the US in 2006. Pioneered Direct Mobile Billing. Funded by Danal and Morgenthaler Publicly traded Korean Co Ventures. March 2010, Danal (KOSDAQ), $200M cap with 200+ became 65% shareholder. employees globally. Launched with Verizon Wireless in Partnered with 14 mobile carriers in May 2010 and AT&T in October 3 countries (Korea, Taiwan & China). 2010. Sprint Announced in February. Processed ~$4 billion in payment volume and 100s of millions of ~50 Merchants contracted & live transactions. with dozens in the pipeline. Integrated over 10,000 online Support ~85% of the U.S. Wireless merchants in Asia. Market.
Selected Carriers / Partners Carriers Merchants Launched May 2010 Launched October 2010 Signed 2/11 Launch Q2 TBD 7
The Rise of the Digital Lifestyle / Consumer Increase in digital content, gaming, virtual goods and digital subscription services Consumers shifting more of their purchases online m-Commerce is fastest growing segment Appeals to the youth market and mainstream consumers Consumers want frictionless and secure ways to pay for their goods Source: ABI Research; IDC Research 8
Why does it matter? Will they pay? From Chris Anderson, Editor-in-Chief, Wired Magazine; the Internet is (was?) the land of the free business models, such as "Freemium," a free version - be turned into cash with the wave of a venture capitalists wand or a well-timed acquisition. But this year, for the first time since 2001, the overall tide of investment and advertising wont rise. Indeed, it will almost certainly fall. Venture capital has dried up, Google is killing products rather than buying them, and Yahoo can barely support itself, much less look for others to fund.
top-10-free-to-play-growth-killers/ Posted by Adrian Crook freetoplay.biz/2008/02/01/top-10-free-to-play-growth-killers/ #9 > Limited Payment Methods fedEx While other territories enjoy a plethora of tailored-to-the-consumer payment methods, North America has embraced relatively few. SMS would surely be nearly as popular a payment method here as it 50% a transaction. Landlines - an expensive but very secure payment option in China - might also be popular with some services.
What & how many payments do you need? Who is your target audience? B<>C, B<>B, S<>SMB, B<>UAC, B<>UBC Where is your target audience? US, Canada, South America, Asia, Europe, UK What is your lowest/average/highest ticket? risk can you afford?/how much transaction cost can you afford?)
Payment Options Popular Domestic Options Visa/MasterCard/Discover/Amex PayPal, Google Check-out, etc. Prepaid Cards Global Payment Options Varies Widely By Country; Germany = Bank Transfer Korea = Carrier Billing
Taking Payments Globally Wallets/Prepaid Cash COD Cell phone Konbini DD/ELV/ACH Real time BT Bank transfer Major cards Local cards References: Zenith Finance 2006, EITO 2007,USA Germany UK Australia China India Japan Brazil Nielsen 2007
Issues for Digital Content ecommerce, especially <$10 ticket size Pricing Models % + Flat Fee for Credit & Signature Debit Cards 2.9% + $.30 ($5 = $.445 fee or 9%) Premium SMS Fees - Range from 25 Direct Mobile Billing Fees Range from 15-19%... Prepaid Card Costs - Range from 15 Fraud/Chargebacks/Manual Review Costs total online revenue which is 38% higher than for other merchant Chargeback fees range from $10 to $25 (which really hurts on a $10 sale!) Source = CyberSource Fraud Survey
What are consumers saying about payment preferences? 40% 35% 30% 25% 20% 15% 10% 5% 0% On Cell Credit PayPal iTunes Amazon Other Phone Card 1-click Bill 80% cited as one of the reasons Source; Nielson App Playbook
Carrier Billing State of the State Up until mid-2010, offering mobile payments for U.S. gamers via carrier billing was not an appealing option for publishers and merchants due to challenges like high rates, surcharges for the consumer and high refund rates. But in Asia, carrier billing accounts for 60%+ of all in-game sales, thanks to the advantages offered by a technology called Direct Mobile Billing (DMB). Now that DMB is available in the U.S., it promises to change the landscape for the gaming market dramatically. Come learn what the differences are between PSMS (premium SMS) based carrier billing 1.0 and DMB based carrier billing 2.0 and the difference it will make for your business.
Direct Mobile Billing vs. PSMS M Mobile E Carriers S S PSMS A 35% Fee 10% Fee PSMS 5-10% Fee Aggregator Processor Merchant ` G I N Billing G Total Fees: System ~50% Direct Connection Into Merchant ` Total Fees: 15-17% 17
Impact On Merchants & Consumers Carrier Billing 1.0 Carrier Billing 2.0 Merchants Merchants Fees of 40% to 65% Fees of 15-17% 1-Factor Authentication 2-Factor Authentication Restricted pricing Dynamic merchant pricing and control Inconsistent subscription support Fully supports subscriptions High (~17%) refund rate Low (1-2%) refund rate Consumers ConsumersReceive less than with CC Receive same value as with CCLess control, no way to refund transactions More control and sense of securitywith the provider Parental controlsNo parental controls 18
Why Now?/ Why Here?Barrier Problem Direct Mobile BillingCost of PSMS PSMS providers charging approximately 50% merchant fees merchant fees to ~15-17%Enrollment/Registration Conversion rates drop significantly No registration required user is alreadyfor ordinary alternative when a user is required to enroll or approved for post-pay transactions by register carrierpaymentsConvenience Consumers tend not to adopt Incredibly simple and streamlined payment offerings that are process that can be done in seconds complex/ time consumingSecurity/Parental Weak authentication and delayed Two factor Authentication + Real-timeNotification notification to account owner Parental NotificationCarrier Engagement Initially hesitant to offer lower rates Proven to reduce disputes and bring and other key features due to fears mobile subscribers a positive value of customer care costs
Consumer Payment Flow The customer selects the pricing option and BilltoMobile. No registration!!Enter phone number and agree to 415 123 4567 the terms. x 20
Zip Code Validation 415 - 94410 We identify the carrier, check for limits, run x 123 - fraud rules, and do zip code validation. 4567 A One Time Passcode (OTP) is then sent to the phone via SMS. ENTERThe customer enters OTP, which is a 4-Digit PIN. 2161 PIN 2161 SUBMIT 21
Transaction Complete! 415 - We verify the OTP and processes 9 x 123 - 4 the transaction. 4567 4 1 0Thank You for YourPurchase! The customer then receives a confirmation SMS. Call, E-mail, or Chat Live with a Self Service Rep Consumer Portal Monitor transactions, initiate dispute 22
What are merchants saying about DMB? - Eric Kwunhttp://www.youtube.com/user/BilltoMobile