Mobile payments are evolving rapidly with new technologies like near field communications (NFC) and the growth of mobile apps. The mobile payments ecosystem involves many stakeholders including banks, telecom operators, device makers, merchants, and consumers. For mobile payments to succeed, these groups must see benefits and standards must be established. Mobile marketing is also growing, with SMS/MMS campaigns seeing higher engagement and returns than web campaigns. The future of mobile payments is still uncertain but may involve different models like centralized apps or distributed interoperability between payment providers.
1. Examining Mobile Payment Innovations
and Technology Advancements
Presented on June 30th, 2010 for IQPC by:
Brennan Hayden
Vice-President, Wireless Developer Agency (WDA)
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2. Introduction
• What are “Mobile Payments”?
– Using your mobile phone to pay or receive funds, using anything other than speaking or
touch tones (IVR)
• SMS based micro-payments
– Text a vending machine to buy a drink.
• Mobile Internet
– Make Internet banking fit on a mobile phone.
• Apps
– Ask the customer to download an application to their handset; possibly connect to a
swipe machine.
• PayPal Mobile Model (original)
– Text a short code to pay a friend
• #cash (an actual service)
– Put the complexity inside the operator
• Near Field Communications (NFC)
– Scan your phone over a sensor to make a payment; like having Paypass in your phone
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6. Why It Matters
Today “The Future”
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Prepaid Cards Mobile Phones
Mobile
Payments
Prepaid Cards
Mobile Phones
Mobile
Payments
7. Introduction (continued)
• Who is Brennan Hayden?
– Started my career at the IRS in 1983 (Unix and SQL were
gonna be BIG!)
– Then, Health Care, Security (my first 2D barcode in
1987!)
– Starting 1993 -- SMS, then Content, now Marketing
– Sent the first text message in the U.S. in 1993
– Founded the SMS Forum (now defunct)
– On the team that trade-marked m-commerce - in 1997!
– Co-founded WDA in 2001, 28 straight quarters of
profitability (and counting)
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10. What are the issues for mobile payments
adoption?
• The complexity of the ecosystem
– Banks
– Telecom operators
– Handset manufacturers
– Regulators
– Merchants
– Card institutions
– Consumers
• All these stakeholders will need to see the benefits
• Standardisation (at national and international level)
14. Mobile Phone Technology Milestones
1994
1996
1998
2000
2002
2004
2006
2008
2010
Nextel Developer Program
AT&T Developer Program
Mobile Web
(Phone.com)
WAP Begins
M-commerce Forum
First BB messaging device
Two-way Text Messaging
in the US starts
Ringtones
Java and
BREW apps
First Blackberry
Smartphone
1999: First year the
term ‘Globalization’
is used
AOL Owns the
Internet; 37M
subs!
Instant Messaging (IM) is
the rage
Inter-carrier text delivery
starts in Europe
SMS Begins
First Blackberry Trackball
First iPhone released
WDA Founded
Camera Phone sales
pass digital cameras
First mass-
market NFC
phone
First Android
Phone
3G
2G
4G
First WIMAX
Phone
iPhone App
Store
Video
1 million Data
users in US!
80 million Data
users in US!
First iPAD
First Western Union
mobile money xfer in
U.S.
16. Mobility has become part of our social DNA and
data-oriented activity is rising
• 262 million US subscribers, nearing 100%
penetration
• 58% of mobile subscribers have done
non-voice data activities
• 53% are active text users, 149 M
• > 12% of subscribers have flat rate data
plans
• > 15% now own smartphones
• iPhone – 7 million sold in Apple’s 4th
quarter alone. One million 3G S sold in
one week, 70 million sold.
• 120,000 apps, 2 B downloads in 18
months.
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20% of all mobile subscribers are
prepaid account s using both text and
voice
(Mercator Primary Data Series research)
250 Million
iPods
1 Billion PCs
1 Billion
Accounts
1.5 Billion
Cards
1.6 Billion
Internet
2 Billion TVs
3.6 Billion Mobile
Phones
17. Wireless POS includes Purpose-built, Smartphone
and Feature-phone Approaches
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Processors
Gateway
Mobile NetworksPurpose-built
Terminals
Feature
Phones
Plenty of Mobile Merchants
• 1,300,000 Service Pros
• 320 Amusement Parks
• 570 Ski Areas
• 16,000 Golf Courses
• 15,000 Specialty Retailers
• 44,000 Temporary Retailers
• 75,000 Taxis
Plus enterprise fleets and
growing “sellers” cadre
Smartphones
18. How to reach your audience in the US
• 240m Mobile Phone Users
• 210m Texting users
• 80m mobile web users
• 50m Email Mobile Users
• 20m text alert users
• 20m iPhone / iPod Touch / iPad users
• 20m mobile video viewers
• 10m Free App Users
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20. Feature Phones Smartphones
Smartphones are
25% of the US Market
50% have unlimited text msg. plans
52% have an unlimited data plan *
Most users have data plans.
Feature Phones make up 75% of the market,
many of them are current devices, but many
are also older, less capable handsets
35% have unlimited text msg. plans
12% have an unlimited data plan
88% of mobile phones are text enabled
64% of mobile phones are Internet enabled
Source: Luth Research Survey June 2009; Comscore June 2009
The Universe of Active Handsets in the U.S.
22. Mobile Marketing Outperforms Web…
Insight Express: Mobile Marketing Qualitative Effectiveness
Across Different Marketing Criteria
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Source: http://www.insightexpress.com/ommamobile (2009)
27. The Case for Mobile Marketing
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• Conversion rates 15-20% and as high
as 30%
• ROI as high as $20 return for every $1
spent
• Increases in opt-in databases have
reached 23%
• At least 2x redemption rates as
compared to other media channels
• Fraction of the cost of the overall
shared mail campaign–mobile easily
pays for itself
• 250-1,200 opt-ins in first few months–
one retailer had 900 in first two
weeks
• Spikes in sales during slow weekdays
and on promotional holidays
• 4% increase in incremental sales
McDonalds Thanks You
Enjoy one FREE Small McCafe
coffee. Valid 1 week.
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MCDONALD
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28. WEB | The basics to making pages look great.
• Dynamic Rendering after Device Detection
• when a browser hits a website, it presents its User Agent
Profile, which your server can read & interpret (voodoo), you
then dynamically render pages to fit that phone.
• You can often determine the carrier, but not the mobile phone
number.
• If your site is not whitelisted with the carrier, they can fool your
site and attempt to re-render your site for you in an effort to
make it fit.
• WAP is an outdated term that is still used to describe mobile
web pages. Today it’s mostly XHTML.
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Experience it!
http://WDA.biz/lxsc0z
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A PC Site is NOT a Mobile Site…
Lexus Mobile Site
Designed for Mobile
• Broken formatting
• Missing images & elements
• Flash inoperative and invisible
• No size recognition
PC broadband HTML site viewed on a
mobile phone:
30. SMS/MMS Mobile Campaign Costs
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• Consultation
• Managed Service vs. Self-Service vs. Hybrid
– Pre-configured campaign options
– Campaign setup/certification/monthly service
– SaaS self-serve license $1k/$5k/$20K+ per month
• Short Code Lease: Shared/Dedicated/Vanity
– $2k setup
– Shared ($500/mo.), Dedicated ($1.5k/qtr.), Vanity ($3k/qtr.)
• Messaging Fees
– Per message: $0.01-$0.07, avg. around $0.03
– Bulk & Unlimited
• Binary Content Delivery $0.20
• Outside Integration (reporting, APIs)
• Extras (sweepstakes indemnification, Web opt-in etc.)
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31. SMS/MMS Campaign Costs
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• Small Low End
– $500 single campaigns or service
– Totally self-service, templated, simple MO/MT, zero custom
• Medium Campaign
– $1000 setup with $500 monthly fees
– Full managed service, templated, common campaign types
• Custom Campaigns
– $5000 to $10,000 plus $1K monthly
– Custom user flows, content, outside integration
– Add on costs ex. sweepstakes indemnification $6,500
• Enterprise Campaigns & Messaging
– $10k-$100K
– Custom enterprise technology integration
– International binds
33. How and Why is Europe (or Japan, Korea, etc.) Different?
• Social, Legal, Economic landscape are way different
• Europe has more ways for vendors to experiment
– 30+ countries; 120+ autonomous mobile operators with
critical mass; no car payments = more electronics
– U.S.: 4 carriers that “matter”; 18 month phone cycle
• Japan and Korea: Industry operates much as a single
corporation; entire countries rebuilt in last 60 years
• India and developing world: giant percentage of
population is under 30; no one has Internet except in
their phone
• U.S. Advantage: Speed of ubiquity when it matters
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34. African Experience - Safaricom
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Within the first month Safaricom had registered over
20,000 M-PESA customers, well ahead of the targeted
business plan. Within the first 8 months, 900,000
customers had registered, 1,200 Agents had signed up
nationwide and a cumulative KShs. 4 Billion had been
transferred. The average amount of money sent per
month was KShs. 41 Million by October 2007. The
average transaction value was below KShs. 5000 (US$
80). By July 2008, there were over 2.5 Million
customers, over 3000 Agents and Mpesa made a deal
with PesaPoint which manages a network of some 140
ATMs thus moving closer to being integrated with the
banking system.
And by April 09 – over 6 million users! 8000 Agents!
35. Multi-modal Mobile Mobile Marketing
SMS, mobile Internet and mobile-enabled
online Web sites. Key solutions provide
SMS verification of money transfers to
customers in 17 countries worldwide.
• Key strategic component of money
transfer SMS verification allows
Western Union to identify the
receiver of money transfers to build
customer base
• Western Union mobile site for mobile
services information and opt-in
• Mobile site “WAP widget” provides
retail locations, coupon promotions,
money transfer tracking, mobile
greeting cards and more
• Online Website for sign-up of SMS
money transfer verification
• Mother’s Day “send a bouquet of
flowers” mobile greeting card
campaign
• “Happy Wednesdays” SMS coupon
promotion for transfer discounts
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Mobile Display Buy:
• Media placements on premium
publishers and carriers including
Mocospace, The Score Mobile,
Weatherbug and Boost Mobile
• Target Males 18-34, Hardee’s core
young, hungry guy user group
• Geo-target to Hardee’s locations &
focus on key markets
Mobile Site Brand Benefits:
• Grow brand awareness through
new channel
• Optimize data capture
• Enable opportunity for future
contact with consumer
• Drive traffic to store
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Display Media Results
• 1,221,076 impressions served
• 15,247 clicks
• 1.25% avg. CTR on sites
• 2.71% avg. CTR on Boost carrier
• Overall CTR dramatically higher than
0.01% avg. online CTR
Over 8 week campaign:
• 11,325 visits
• 6,754 unique visitors
• 21,086 page views
• 952 product names submitted
• 407 SMS alert opt-ins
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Order by text message
1. Link Your Mobile Phone
Use your mobile phone to order by text
message, and to receive text message pick-
up time confirmations.
2. Create Favorites
Create your orders and save them as
Favorites.
2. Order On the Go
Just text 'menu' to 466626 for a list of your
favorites. Reply with the number of the
favorite you want to order. You'll receive a
text confirmation and pick up time!
Developer: GoMoBo
Breaking New Ground:
Five Guys becomes the first
company to use the Radiant RPOS-
integrated point-of-sale system on
a national level
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• Serious outreach to the developer
community
• Focused on enabling App developers to
enable payments within their apps
• Already a big presence and
infrastructure in mobile payments
• Experiences in dealing with mobile
carriers
Contest categories include:
• Best application that leverages PayPal X’s
Mobile Payments Library (available on iPhone
and Android)
• Best application built by university students
• Best consumer application
• Best application that promotes cross-border
commerce
• Best application that takes advantage of
Yahoo’s platform
• Best application that takes advantage of eBay’s
platform
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• Uses the hands-free port as the
card reader interface (audio
jack)
• Fully secure/compliant
• Company offers a full mobile
shopping experience as, for
merchants
• Supports iPhone, Android
41. More Case Studies
• Roamware launched a service in Ireland with a national
financial institution, Permanent TSB, that allows card-
less ATM cash withdrawal triggered by an SMS (a text)
• Parking meters in Ireland and elsewhere have nearly
been completely replaced by text-pay. Meter cops scan
a barcode on the windshield that links to an account to
confirm payment.
• Valley National Bank (New Jersey) has teamed up with
Bling Nation to offer mobile payments to businesses
and consumers, enabling tap-and-pay purchases at the
point of sale.
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43. Some Sources of Further Information
• http://www.mobeyforum.org/?page=white-paper-
implementer-guidelines
• http://www.smartcardalliance.org/pages/publications-
proximity-mobile-payments
• http://www.mercatoradvisorygroup.com/
• The History of Money, Jack Weatherford, 1997
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