Dan Armstrong presented at the Mobile Convention in Brussels on focusing transactions through mobile channels. He discussed defining transactions broadly to include more than just payments, like loyalty programs and coupons. Armstrong noted that consumers trust brands and are willing to pay more and recommend trusted brands. He outlined debates around mobile proximity payments between emulating cards versus bypassing them. Armstrong also questioned what is expected from digital wallets and transaction devices in the mobile era.

1. Has Anyone Asked a Customer?
Mobile Convention Brussels (05 November 2013)
Dan Armstrong (dan.armstrong@takashimobile.com)

2. marketplaceMCI (1994-96)

3. marketplaceMCI (1994-96)

4. 1-800-MUSiC-NOW (1996)

6. How shall we define “transaction”?
Bank Account Value
Transfer, Payments
Value Depletion, Prepaid,
Wallets, Transportation
Loyalty, Points, Coupons,
Transformation Moments
Eyeballs, Trust,
Engagement, Action <?>

7. Trust?
 50% of consumers will pay more for products they trust
 78% of consumers will look first to trusted brands when
in need of products or services
 78% of consumers are willing to give trusted brands a
chance, even if unsure of what value the product or
service will bring to them
 82% of consumers will choose to use a trusted brand’s
products or services frequently, rather than move
between brands
 83% of consumers will recommend a trusted brand to
others, often un-prompted
Concerto Marketing Group, Vancouver BC, Canada / Ontrack Advisory, Singapore (April 2013)

8. Focusing on “transactions”
Transactions via the Channel
Transactions are the Channel
”I have stuff I want to do via channels. Enable my consumers to
control their bank account, make a payment, get a ticket, see an
ad, save or use loyalty points, etc.”
”I have a pipe and/or network and I want to monetise the
investments I made in creating it.”
”I need as many (cost effective) channels and pipes to do it.”
”I want as much to get through that pipe and the (mobile)
phones accessing it as possible.”

9. Mobile Proximity Payments: A Fundamental Divide
Card Emulation
 Phone takes the place of a
physical card to transact at a
physical merchant location
 Consumers are comfortable
with card operating models
 Standardisation and ubiquity
of acceptance points a must
for economies of scale
 Requires compatible
card/mobile acceptance
infrastructure
Bypass Card Emulation
 Trigger remote payment with
phone (apps, other manner)
 Confirmation can be pushed to
merchant, but how to localise
the payment location without
NFC?
 Receipt can be printed at POS
 Latency in making payment
this way vs. cards
 EMV / secure PIN keypad
 Card acceptance still required

10. Mobile
Authentication
Enables Payment
bypass card-emulation
Card
Authentication
Enables Payment
Counter Enables
Payment
card-emulation
Card Emulation vs. Bypassing Card Emulation
value on the card
value in “the cloud’

11. Mobile NFC PIN Emulation Trial @ C1000 (2007-08)

12. Mobile NFC for Low-Value Payments in Vending (2007-08)

13. NFC Mobile as Retail Shopping Tool, Issued Device & Acceptance
Point @ AH To-Go (2008)

14. Use a Phone to
Accept a NonCard Payment
Use a Phone to
Accept a Card
Payment
Mobile phones accepting cards, leverages existing card
bases

15. Will BLE fill the gaps?
PayPal Beacon
Estimote iBeacon
PayPal Beacon and iBeacon aren’t really about the “transaction” in the traditional
sense. They focus on the “customer journey” – and seek to address the nextgeneration merchant’s priorities.

16. 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?

17. Then, what do we expect from a transaction 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

18. The Consumer’s Perspective on NFC?
 Consumers seem to love and trust it
• But who will pay for it’s implementation … merchants, banks, mobile
operators, 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, but
not to our wallets?
• Leave cards at home?
• Add value to transactions?

19. The Consumer’s Perspective on NFC?
 Cards seem to be entrenched in many markets, and are
likely to remain in play for the foreseeable future,
simply increasing the issuer and acquirer costs.
 But, is NFC is fundamentally different from previous
steps forward in functionality .. ?
SMS
Mobile Data
Apps
Online Shopping
& Payment

20. Virtualisation benefits are clear, from the bank’s POV ..
500
450
400
Total Customer Contacts
* 1 million
350
Contacts via devices
(e.g. web
browser/internet, mo
bile phone, IVR)
300
250
200
150
Contact via a
bank advisor,
bank branch
100
50
0
1980
1985
1990
1995
2000
2005
2010

21. For your consideration .. impulse purchase / spam

22. For your consideration ..

23. Thank You!
Dan Armstrong
Takashi Mobile | Financial Services
Rapenburgerplein 81
1011 VJ Amsterdam
The Netherlands
www.takashimobile.com
dan.armstrong@takashimobile.com
+31 652 085 071
skype: dd.armstrong