1. E-print | from Paybefore Update | November 2012
• The industry resource for prepaid and emerging markets •
news article
SMP: Americas: The Fight for Relevance
By Loraine DeBonis, Editor-in-Chief
I
f mobile payments success stories— lives and providing economic uplift When asked whether mobile
and a familiar refrain from pay- should be everyone’s intent playing in payments or “everything else” in
ments conferences, including last this space,” he noted, citing the stan- addition to the payment is the more
week’s gathering in Miami—are any dard example of M-PESA, which now significant opportunity in mobile
indication, the winners in mobile processes the equivalent of 30 percent commerce, Holmes responded, “I
payments are going to be those that of Kenya’s GDP through its mobile personally believe—and where we are
find a way to provide value. And, that money network. Seventy percent of focused is on—everything else. We’re
value may be easier to see in developing Kenyans have used the service, which doing a lot of payments—we process
markets, where the mobile phone is not enables P2P and bill payments. (On more than a billion dollars a year—but
competing with existing payments Nov. 8, Vodafone and ICICI Bank what we’re seeing over the next 12 to 18
infrastructure that already works well. announced they were bringing M- months is that it’s the exchange of
“[Mobile payments has] never been PESA to India.) information and how you engage the
about technology … it hasn’t been Tom Holmes, executive vice president customer to provide more value [that is
about banks cooperating with the and chief information officer at 3Cinter- key].”
telcos—it’s always been about the active, a cloud-based mobile software Holmes added that SMS is an
consumer,” Jojo Malolos, former company, explained that in today’s effective channel for reaching consum-
president and CEO of Smart Money, environment, information trumps the ers since 90 percent of SMS messages
told attendees at the Social Mobile transaction. 3Cinteractive provides are opened within two minutes.
Payments: Americas conference in corporate clients with payment solutions
Miami last week. “Segmenting the that solve specific problems. For example, Wallet Wars: NFC
market is the No. 1 tool,” he said, Holmes described a retail pharmacy versus the Cloud
adding that educating the consumers client that sends mobile communications No mobile commerce conference
you’re trying to reach with your mobile via IVR and text to encourage customers would be complete without the debate
commerce initiatives will continue to to pick up prescriptions. About 20 over whether NFC or the cloud will
be one of the most important and percent of all prescriptions are never dominate at the point of sale, and SMP:
greatest costs of operation and deploy- picked up, resulting in hundreds of Americas was no exception.
ment for any mobile money provider. millions of dollars in lost revenue New statistics on NFC-enabled
Malolos—who helped lead Smart industry-wide, according to Holmes. mobile handset and POS terminal
Money, a project of the Philippine Long “It’s about the exchange of informa- penetration in the United States
Distance Telephone Company—said tion, not just the exchange of money,” released on the first day of the confer-
despite 140 deployments of mobile Holmes noted. Rather than the typical ence challenged a prevalent view that
money across the world, there’s been marketing 101 principles of product, mass adoption of NFC mobile pay-
limited success in terms of transaction price, placement and promotion, ments is still years away. Every 10
volumes. Holmes says the focus should now be seconds, 100 NFC-enabled phones are
“Africa is becoming a model even on the four Es: experience, exchange, being sold, according to Einar Rosen-
for developed countries in engaging the every place (i.e., being every place your berg, chief technology officer of Narian
unbanked,” he continued. “Improving consumers are) and engagement. Technologies.
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2. E-print | from Paybefore Update | November 2012
• The industry resource for prepaid and emerging markets •
“NFC is the fastest-growing tech- Don’t Forget Consumer find a way to enhance both the con-
nology in history,” said Rosenberg, Experience sumer experience and convince the
whose company focuses on NFC During a presentation entitled “One merchant that it’s worthwhile.” He
services and applications, adding that Wallet or 100?,” Barbara Ballard, vice cited an example of vending machines,
by Q1 2013 at least 50 percent of president of customer experience in which could benefit from a mobile
smartphones in the U.S. will have NFC. marketing for C-SAM, the company payment solution since more and more
Rosenberg also said that one in six POS that provides the mobile wallet plat- consumers leave home without cash.
terminals in the U.S. already is NFC- form for Isis,
enabled, although not all of them have challenged the
the functionality turned on. “Anyone audience to stop
who underestimates NFC, it’s their asking the typical
mistake.” questions. “What “It’s about the exchange
But Rosenberg also noted that technology will of information, not just
payments would not be the most win? What is the
important function of NFC. “The real future of NFC in the exchange of money.”
key for retail is not payments; it’s the the secure ele- —Tom Holmes, 3Cinteractive
ability to use NFC from the moment ment? What is the
you enter the store until you get to the killer app for the
cash register,” Rosenberg said, citing wallet? Those are
the information-discovery capabilities all good questions, but they are all And, the phone provides loyalty and
of NFC tags—which he said are less beside the point,” said Ballard. “We are marketing capabilities that a card by
likely to be tampered with than 2D in the early days. We don’t have mass itself cannot, Cintron said. “It took us
barcodes and can provide retailers with adoption.” The question industry (and 40 years to get here [to current pay-
more control over the information journalists) should be asking, accord- ments infrastructure], we aren’t going
shared. Instead of a 2D barcode, Rosen- ing to Ballard, is: How do we encourage to get out of it in two to five years,” he
berg explained that more retailers and adoption? added. “In the meantime, we can start
marketers will shift to NFC tags For consumers to begin using with loyalty and couponing, initially
consumers—with NFC-enabled mobile wallets, she noted, perceived linking them to the card and over time
phones—will be able to “tap” for more security and value are critical. But the linking them to mobile payments.”
information, a promotion, coupon, etc. solution also must increase simplicity, Jim Sullivan, partner at marketing
Not everyone is convinced, however. convenience and efficiency. A solution and loyalty research and publishing firm
Other speakers touted the benefits of that requires unlocking a phone, COLLOQUY, said the mobile phone is a
the cloud and cited the pushback from opening an app, entering a PIN and perfect device for mobile marketing.
merchants on investing in NFC selecting the payment method within “There are a lot of unmet needs there,
terminals. “Our view is that m-com- the wallet before making a purchase, and I think you’ve got a superior
merce should be inclusive and not probably doesn’t improve the consumer solution in mobile [because of relevant
restrictive,” said Robert D. Martin, experience of pulling a card from a targeting opportunities], but who wants
senior vice president and general physical wallet, she noted. to be walking around with a spam
manager of attended merchant solu- During a panel on “What Really machine in their pockets? … A lot of
tions, Apriva, a wireless transaction Matters in Mobile Payments: The brain power needs to be put to work on
and information solutions provider. Consumer,” experts discussed the what does the consumer really need.”
“We want to be evolutionary, not importance of loyalty and marketing When asked about which technol-
revolutionary,” he said. “If you go in for mobile payments as well as focusing ogy will win, Cintron concluded:
and tell a merchant ‘You have to do on what the consumer really needs, not “Something is going to dominate, but
this,’ you’re not going to cross the just what technology can provide. honestly I don’t think we know. … The
chasm. You’re not even going to In developed markets, mobile consumer is the one that cares the least
approach the chasm. . . . The only way payments compete with traditional [about which technology wins]. They
[forward] is through the cloud,” which payments, said Miguel Cintron, vice don’t want to have to think about it.
Martin said enables merchants to president of business development for They just want it to work. If they have
experiment with mobile payments payments processor i2c Inc. “In more to think about it, then we haven’t done
without a big investment risk. industrialized markets, you have to our job.”
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