The FuTureIs In Yourhands:TodaY’s MobIle opporTunITIes andhow You Can eMbraCe TheM nowWith cell phone ownership crossing t...
whY MobIle?  The growth and increasing sophistication of the mobile market has been one of the most important technologica...
The Mobile landscape                                                     Although cell phone ownership rates among adults ...
Although this shift represents real opportunity, rapid         change, industry fragmentation and scarce development      ...
To many – especially companies with severely constrained         development resources – this plan makes sense when       ...
Benefits of Including Text               Payments Functions Consumers Are          Intrested In Performing With A Mobile D...
No matter what the approach to mobile you elect to use,                                          about western union payme...
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Western-Union-Payments-Mobile-White-Paper.pdf

  1. 1. The FuTureIs In Yourhands:TodaY’s MobIle opporTunITIes andhow You Can eMbraCe TheM nowWith cell phone ownership crossing the 85% penetration rate in the US,companies all over are questioning their mobile strategy. Discover thelatest mobile landscape, the benefits, and best practices for texting/mobilechannels that you can put to use right away.
  2. 2. whY MobIle? The growth and increasing sophistication of the mobile market has been one of the most important technological developments of the last decade. It has changed the way we interact with our friends, our families and our communities at large, the way we structure our work and our personal lives, and even the way we approach tasks as simple as listening to music, driving across town, and taking pictures of our children. But even though mobile tools have enabled significant changes to date, the future implications for mobile technologies are larger still. Mobile devices have the potential to provide a complete set of electronic tools for the consumer and are poised to take on every function that the contents of our wallets, pockets and purses perform today. A mobile device can carry payment information, transmit identifying personal data and allow the owner to access one’s residence, office or public transportation system. Furthermore, it can function as a communication device for sending messages and alerts, and act as an Internet access point. In short, mobile devices are poised to facilitate and act as the hub for any transaction or interaction that a consumer may wish to initiate. In the coming years, as devices, businesses and users become more sophisticated, billers will have an unprecedented opportunity to engage with their customers through automated touch points like billing, payment alerting and acceptance tools, as well as two-way communication channels available through mobile and social tools, all while personalizing these interactions to an extraordinary degree. There is no question among billers both large and small that developing a mobile strategy to address the current and future needs of customers is critical. However, resource constraints, combined with a rapidly shifting technological landscape can act as barriers to fully investing in a mobile offering complete with apps, mobile optimized web sites and event-based text messaging. Despite those barriers, it is important for each billers to build its own mobile case, based on what makes sense for your business, and then define short and long-term goals, prioritize initiatives, and engage with your vendors and business partners to ensure that you can meet the market as quickly and strategically as possible. Terms you need to know: Apps: An abbreviated term for third-party software applications can also include messages that contain other media, like that are developed specifically for mobile devices and their images and sound (MMS, or Multi Media Service). This two- associated operating systems (e.g., Apple iOS for iPhone, way communication protocol can be used for time-critical Google’s Android OS, etc.). These programs range in size, alerts, updates and reminders, mobile campaigns, content and complexity and price, and serve to allow individual users to entertainment applications, as well as to trigger an action or customize their smartphone to meet their wants and needs, update on the receiver’s side. while enjoying a standardized experience. Smartphone: A device that combines cellular telephone Mobile Optimized Sites: Are simplified versions of websites functionality with computing power, usually in the form of a designed for a smaller screen with stripped down navigation and proprietary operating system, software or apps, web access interfaces, limited or no complex objects and resized links to and messaging capabilities. Touchscreens and full alphabet promote usability across a broad range of mobile devices. keyboards are also typical features. Text Messages: The exchange of short, unencrypted Feature Phone: Usually defined as any phone that is not a messages between devices over a network. Although text smartphone, a feature phone provides voice calling and texting messages (or texts) are sometimes referred to as SMS capabilities, and may allow web access, depending on the device. (Short Message Service), the servicePage 2
  3. 3. The Mobile landscape Although cell phone ownership rates among adults began to plateau in 2009, what has increased significantly is the sheer In 2004, 65% of American adults reported owning a cell number of things that Americans are using their phones to phone. This number grew rapidly until 2010, when the do. Use of mobile technology to perform tasks other than US achieved an 85% mobile device ownership rate talking on the phone may be especially visible and most among adults.1 striking among younger consumers, but all American adults are increasing their use of non-voice activities, with 72% of Cell Phone Ownership all American adults now using text messages.2 % of all adults in each group who have a cell phone Total 85% The Use Of Non-voice Data Applications Has Grown Significantly Over The Last Year Gender The % of cell phone owners who use their phones to do the following Men 88 Women 82 Take a picture 66 76 Age April 2009 Send or receive 65 18-29 96 text messages May 2009 72 30-49 90 27 Play a game 50-64 85 34 65+ 58 25 Send or receive email 34 Race/Ethnicity 25 White, non-Hispanic 85 Access the internet 38 Black, non-Hispanic 79 21 Play music Hispanic 84 33 Household Income Send or receive 20 instant messages 30 Less than $30,000 75 19 $30,000-$49,999 90 Record a video 34 $50,000-$74,999 93 $75,000+ 95 Source: Pew Research Center’s Internet & American Life Project, April 29-May 30, 2010 Tracking Survey. N=2,252 adults 18 and older; n=1,917 based on cell phone users. Education level Less than High School 69 High School Diploma 82 With this rise in ownership and increased use, mobile Some College 91 phones have permeated many aspects of our lives. College+ 90 A full 65% of all adults claim to sleep with their cell phone Geography on or next to their bed3 and 25% of households (and 23% Urban 84 of all adults) in the second half of 2009 had no landline Suburban 86 service.4 In addition to replacing our alarm clocks and Rural 77 home phones, the rising prevalence of mobile has Source: Pew Research Center’s Internet & American Life Project, broader technological implications. According to the August 9-September 13, 2001 Tracking Survey. N=3,001 adults 18 market research firm, International Data Corp, the global and older, including 1,000 reached via cell phone. Interviews were conducted in English (n=2,804) and Spanish (n=197). smartphone market has now outpaced that of PCs. Makers of mobile devices distributed a total of 101m smartphones in Q4 2010, representing a massive 87.2 per cent year-on- year increase in numbers, compared to just 5.5 per cent for PCs.5 In other words, smart phones appear poised to take over many of the functions we currently associate with our laptop and desktop computers.Page 3
  4. 4. Although this shift represents real opportunity, rapid change, industry fragmentation and scarce development U.S. Smartphone Operating System resources make it challenging to act quickly on mobile. Share - 6 mo. Recent Acquirers Adult Smartphone Consumers, Jun - Nov 2010 As a rule, frequent service users with smartphones generally demand that apps be available to facilitate an 37.6% 40.8% 36.5% optimal “curated” account management experience on 35.0% 32.0% a regular basis, while mobile optimized Internet is the 27.5% 28.0% 26.2% 25.6% 27.1% 27.2% 26.9% channel of choice for more occasional service needs and 20.5% 25.3% 24.9% inquiries. That being said, there is often a lag between 20.7% 19.8% 19.2% intent and execution. According to independent research Android RIM BlackBerry OS Apple iOS firm, Forrestor Research, Inc’s Q3 2010 Global Mobile Maturity Online Survey, 47% of executives interviewed Jun 2010 (n=1425) Jul 2010 (n=1414) Aug 2010 (n=1744) Sep 2010 (n=1802) Oct 2010 (n=1846) Nov 2010 (n=1632) reported they have an optimized mobile website and 41% Source: The Nielsen Company plan to have one.6 However, in reviewing the Fortune 50, Burson-Marsteller and Proof Integrated Communications found that only 38% of these companies have mobile U.S. Smartphone enabled websites and only 43% of those companies with Operating System Share sites optimized for mobile use have transactions enabled Adult Smartphone Consumers, Jun - Nov 2010 on those sites.7 Consumer brands will invest in mobile 33.9% optimized websites, but that investment has proven to be 31.6% 31.2% 28.6% 27.9% 28.6% a slower process than many initially might have thought. 27.9% 28.4% 28.3% 27.4% 27.3% 26.1% What’s more, mobile product professionals have been 21.9% 22.7% 25.8% frustrated by the high cost of native app development 19.0% 15.0% 15.8% and maintenance across multiple platforms. Especially Android RIM BlackBerry OS Apple iOS since that expense does not always translate into maximum reach. It is also difficult to determine which Jun 2010 (n=4185) Jul 2010 (n=3942) Aug 2010 (n=4547) Sep 2010 (n=4754) Oct 2010 (n=4889) Nov 2010 (n=4371) operating system to invest in when developing an app Source: The Nielsen Company strategy. Despite being limited to AT&T subscribers (which accounts for about 27% of mobile subscribers8) Apple’s iPhone has held steady among smartphone users in U.S. Network Operator Share the last quarter of 2010, with about 30% market share. Scorce: comScore MobiLens, 3 mo. ave. ending Dec-2010 Meanwhile, Android has gained considerable traction. Among consumers who have purchased a smartphone in 2.2% 1.8% 2.8% Verizon the last six months, 40% have opted for a phone with an 4.2% Android OS.9 Adding RIM’s Blackberry position into the AT&T mix, as well as Verizon’s recent addition of Apple’s iPhone T-Mobile to their equipment roster, makes the landscape even 6.0% 31.3% Sprint more challenging. As a result, many billers have indicated Tracfone that they may slow down app development in the short 11.9% Sprint Prepaid term to better determine the direction of the market. MetroPCS 12.2% US Cellular 26.6% Cricket OtherPage 4
  5. 5. To many – especially companies with severely constrained development resources – this plan makes sense when Which Of The Following Mobile Phone considering smartphone vs. feature phone distribution. Features Do You Use? Smartphones account for about 30% of the total US 91% iPhone 92% mobile phone population. It is true that smartphone 80% adoption is growing, but it is also important to consider 87% Smartphone 63% that among the population of recent acquirers, 45% may 35% have chosen a smart phone, but the majority (55%) opted 81% Hispanic/Latino for a feature phone.10 27% 17% 80% Gen Y U.S. Smartphone Penetration 14% 20% Adult Smartphone Consumers, Jun - Nov 2010 75% Mobile bankers in 46% the last 90 days 45% 29% 44% 43% 41% 39% 66% 34% More than $100K 30% 31% Text messaging (SMS) 30% 30% 16% 27% 28% 24% Browse web pages July 2009, n=89, 375, 478, 1,498, 3,000 Base: All consumers with mobile. ©2010 Javelin Strategy & Research Downloading applications Jun 2010 Jul 2010 Aug 2010 Sep 2010 Oct 2010 Nov 2010 The ubiquity, penetration and 2-way nature of text messages (n=17386) (n=17665) (n=18978) (n=17538) (n=19868) (n=16800) present an excellent opportunity for billers and their partners All Customers 6 Mo. Recent Acquirers Source: The Nielsen Company to build off their existing relationship with the consumer and capitalize on the familiarity and trust already in place. Real- time, actionable alerts with integrated payment capabilities are a strong tactic for engaging mobile consumers. The Case for Text Messages What’s more – the market appears to be primed to accept Although it is true that most mobile industry’s attention is payments by text message. Currently, 32% of online bill focused on apps for smart phones (and to a lesser degree, payers report doing so in locations other than home or mobile optimized Internet sites), it’s important to consider work.12 Despite a dearth of available solutions today, nearly what mobile strategies will deliver value to the broadest 1 in 5 consumers indicated that they are interested in using possible customer base and will best impact your bottom a mobile device for bill payment and 13% are interested in line. The smartphone penetration statistics cited above, receiving text message alerts for transactions.13 combined with the fact that 72% of all adults with a mobile device use it to send text messages11 both serve to position a two-way text message channel as an excellent initial foray into the mobile space, or as a complement to other mobile initiatives. Virtually all of the mobile phones on the market today have texting capabilities, and texting adoption is strong across all demographicsPage 5
  6. 6. Benefits of Including Text Payments Functions Consumers Are Intrested In Performing With A Mobile Device Messaging in a Mobile Strategy: • Provides a new, convenient solution to your customers Paybills 19% • All phone types are supported Transfer funds 15% between accounts • All major carriers are supported Use my mobile phone to make 14% in-store purchases (physical) • Easy to implement with no capital expenditures if Receive text messages alerts for tranactions 13% using an outsourced solution Make purchases online through my phone 11% • Self service enrollment and management – the Transfers to other customer enrolls online or on the phone and provides 10% individuals at other Fls payment and cell phone information Load prepaid card 8% • Flexible – the customer opts in, can choose whether July 2009, n=515 or not to make a payment and can stop at any time Base: All consumers who have used mobile banking in the last 12 months. ©2010 Javelin Strategy & Research • Scalable – can support messages, alerts, reminders, payments and confirmations To capitalize on this trend, some billers are looking to their payment partners to provide pay by text functionality while Best Practices for Text others are exploring the possibility of building in-house. Messaging Programs: Regardless of the approach you may wish to take in a pay • Partner with all major carriers by text program, it is important not to dismiss this channel • Perform due diligence with each carrier to ensure as a way of engaging with your consumer base and offering the service meets individual carrier compliance them enhanced self-serve capabilities on a real-time basis. requirements Consumers are beginning to rely on and expect alerts. In 2010, 34% of US adults with cell phones received SMS • Standardize messages alerts, and Forrester expects consumers will begin to rely • Eliminate exchange of personal data over on and expect alerts in the future. Based on some initial 14 non-encrypted SMS channels by promoting results that we have seen across several billers, many enrollment through electronic channels customers use these text message alerts as a notification • Actively market the service at multiple customer tool, choosing to transact in the traditional electronic touch points channel. However, this incidence may vary from market to market, as one biller’s preliminary results show that 22% of • If multiple partners are providing separate payment text messages have resulted in a payment. and service notification functions, ensure that they are committed to working together to deliver a comprehensive solution for your businessPage 6
  7. 7. No matter what the approach to mobile you elect to use, about western union payments: we believe that mobile channels can bring considerable value to billers, especially as mobile users become Western Union® Payments is committed to helping more prevalent and more sophisticated, bringing new billers create the most value from their payments expectations and a different perspective on what strategy by partnering to give your customers convenient, constitutes a set of truly convenient customer service cutting-edge ways to pay. From presentment to payment, options. Payments are one of the most frequent touch our services offer billing cycle solutions that can help points between billers and consumers. As such, these you to meet efficiency, cost reduction and customer mobile transactions have the potential to deliver value by satisfaction goals. In 2010 we processed more than anticipating market trends, enhancing customer satisfaction 405 million transactions through a full complement of through convenience, immediacy, simplicity and control, electronic and walk-in channels and payment types, allowing you to service consumers with something as simple and we continue to develop innovative, industry-leading as bill payments done the way they want while further solutions that meet the needs of our partners. For more automating your entire service environment. information, visit choosewesternunion.com/future Finally, we feel that it is important to note that to ensure alignment with your company’s mobile plans, make sure your payment partners have a well-articulated strategy in place for apps across multiple operating systems, as well as mobile web capabilities, to ensure that they are appropriately positioned to continue to grow with you and anticipate and meet future needs. 1 Pew Internet & American Life Project, Aaron Smith, “Americans and their Gadgets”, October 14, 2010, http://pewinternet.org/Reports/2010/Gadgets.aspx 2 Pew Internet & American Life Project, Aaron Smith, “Mobile Access 2010”, July 7, 2010, http://pewinternet.org/Reports/2010/Mobile-Access-2010.aspx 3 Pew Internet & American Life Project, Amanda Lenhart, “Cell Phones and American Adults”, September 9, 2010, http://pewinternet.org/Reports/2010/Cell-Phones-and-American-Adults.aspx 4 Pew Internet & American Life Project, Amanda Lenhart, “Cell Phones and American Adults”, September 9, 2010, http://pewinternet.org/Reports/2010/Cell-Phones-and-American-Adults.aspx 5 FT.com, Joseph Menn, “Smartphone Shipments Surpass PCs”, February 8, 2011, http://www.ft.com/cms/s/2/d96e3bd8-33ca-11e0-b1ed-00144feabdc0.html#ixzz1DVAmAjEZ 6 “2011 Mobile Trends”, January 2011, Forrester Research, Inc. 7 http://www.flowtown.com/blog/fortune-50-use-of-mobile-if-youve-got-it-flaunt-it, Accessed 2/16/2011 8 “The comScore 2010 U.S. Digital Year in Review”, February 7, 2011, http://www.comscore.com/Press_Events/Presentations_Whitepapers/2011/2010_US_Digital_Year_in_Review 9 The Nielsen Company, “Apple Leads Smartphone Race, while Android Attracts Most Recent Customers”, January 3, 2011, http://blog.nielsen.com/nielsenwire/online_mobile/apple-leads- smartphone-race-while-android-attracts-most-recent-customers/, Accessed February 9, 2011 10 The Nielsen Company, “Apple Leads Smartphone Race, while Android Attracts Most Recent Customers”, January 3, 2011, http://blog.nielsen.com/nielsenwire/online_mobile/apple-leads- smartphone-race-while-android-attracts-most-recent-customers/, Accessed February 9, 2011 11 Pew Internet & American Life Project, Aaron Smith, “Mobile Access 2010”, July 7, 2010, http://pewinternet.org/Reports/2010/Mobile-Access-2010.aspx 12 Synergistics Research Corporation “Mobile Payments: The Consumer Perspective”, October 2008 13 “2010 Mobile Payments — Crossing the Chasm: Industry Models Battle to Bridge the Gap”, May 2010, Javelin Strategy & Research 14 “2011 Mobile Trends”, January 2011, Forrester Research, Inc.Page 7

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